area handbook series 

Austria 

a country study 




Austria 

a country study 



Federal Research Division 
Library of Congress 
Edited by 
Eric Solsten and 
David E. McClave 
Research Completed 
December 1993 




On the cover: Coat of arms of the Republic of Austria 



Second Edition, First Printing, 1994. 



Library of Congress Cataloging-in-Publication Data 



Austria : a country study / Federal Research Division, Library of Con- 
gress ; edited by Eric Solsten and David E. McClave. — 2nd ed. 

p. cm. — (Area handbook series, ISSN 1057-5294) 
(DA pam ; 550-176) 

"Supersedes the 1976 edition of Area handbook for Austria, 
coauthored by Eugene K. Keefe et al." — T.p. verso. 
"Research completed December 1993." 

Includes bibliographical references (pp. 273-286) and index. 
ISBN 0-8444-0829-8 

1. Austria. I. Solsten, Eric, 1943- . II. McClave, David E., 
1947- . III. Library of Congress. Federal Research Division. 
IV. Area handbook for Austria. V. Series. VI. Series: DA pam ; 



550-176. 
DB17.A8 1994 
943— dc20 



94-21665 
CIP 



Headquarters, Department of the Army 



DA Pam 550-176 



For sale by the Superintendent of Documents, U.S. Government Printing Office 
Washington, D.C. 20402 



Foreword 



This volume is one in a continuing series of books prepared by 
the Federal Research Division of the Library of Congress under 
the Country Studies/ Area Handbook Program sponsored by the 
Department of the Army. The last two pages of this book list the 
other published studies. 

Most books in the series deal with a particular foreign country, 
describing and analyzing its political, economic, social, and national 
security systems and institutions, and examining the interrelation- 
ships of those systems and the ways they are shaped by cultural 
factors. Each study is written by a multidisciplinary team of social 
scientists. The authors seek to provide a basic understanding of 
the observed society, striving for a dynamic rather than a static 
portrayal. Particular attention is devoted to the people who make 
up the society, their origins, dominant beliefs and values, their com- 
mon interests and the issues on which they are divided, the nature 
and extent of their involvement with national institutions, and their 
attitudes toward each other and toward their social system and 
political order. 

The books represent the analysis of the authors and should not 
be construed as an expression of an official United States govern- 
ment position, policy, or decision. The authors have sought to 
adhere to accepted standards of scholarly objectivity. Corrections, 
additions, and suggestions for changes from readers will be wel- 
comed for use in future editions. 

Louis R. Mortimer 
Chief 

Federal Research Division 
Library of Congress 
Washington, DC 20540-5220 



iii 



Acknowledgments 



This edition supersedes the Area Handbook for Austria, published 
in 1976. The authors wish to acknowledge their use of portions 
of that edition in the preparation of the current book. 

The authors also are grateful to individuals in various United 
States government agencies who gave their time and special 
knowledge to provide information and perspective. These individu- 
als include Ralph K. Benesch, who oversees the Country Studies/ 
Area Handbook Program for the Department of the Army. Frank 
J. LaScala reviewed portions of the manuscript and provided mili- 
tary photographs. In addition, the authors wish to thank various 
members of the staff of the Embassy of Austria in Washington, 
especially Hedwig Sommer, and of the Austrian National Tourist 
Office in New York for their assistance. 

Various members of the staff of the Federal Research Division 
of the Library of Congress assisted in the preparation of the book. 
Sandra W. Meditz made helpful suggestions during her review of 
all parts of the book, as did Andrea M. Savada. Tim L. Merrill 
assisted in the preparation of some of the maps, checked the con- 
tent of all the maps, and reviewed the sections on geography and 
telecommunications. Thanks also go to David P. Cabitto, who 
provided graphics support; Wayne Horn, who designed the cover 
and chapter art; Marilyn L. Majeska, who managed editing and 
edited portions of the manuscript; Laura C. Wells, who helped pre- 
pare the Country Profile, tables, and Bibliography; Andrea T. Mer- 
rill, who managed production; and Barbara Edgerton, Alberta Jones 
King, and Izella Watson, who did the word processing. 

Others who contributed were Harriett R. Blood and the firm 
of Greenhorne and O'Mara, who assisted in the preparation of 
maps and charts; Martha E. Hopkins, who edited portions of the 
manuscript; Sheila L. Ross, who performed the final prepublica- 
tion editorial review; and Joan C. Cook, who prepared the Index. 
Linda Peterson of the Library of Congress Composing Unit pre- 
pared camera-ready copy under the direction of Peggy Pixley. The 
inclusion of photographs was made possible by the generosity of 
various public and private agencies. 



v 



Contents 



Page 



Foreword iii 

Acknowledgments v 

Preface xiii 

Country Profile XV 

Introduction xxi 

Chapter 1. Historical Setting 1 

Steven R. Harper 

THE ALPINE-DANUBIAN REGION BEFORE THE 

HABSBURG DYNASTY 4 

The Celtic and Roman Eras 4 

The Early Medieval Era 5 

The Holy Roman Empire and the Duchy of Austria . 6 

RISE OF THE HABSBURG EMPIRE 7 

The Habsburg Dynasty in the Late Medieval Era ... 7 

Territorial Expansion, Division, and Consolidation . . 8 

The Protestant Reformation in the Habsburg Lands . . 9 

The Turkish Threat 10 

THE COUNTER-REFORMATION AND THE THIRTY 

YEARS' WAR 11 

Division and Rebellion 11 

The Thirty Years' War, 1618-48 11 

The Peace of Westphalia 12 

THE BAROQUE ERA 13 

Political and Religious Consolidation under Leopold . . 13 

The Turkish Wars and the Siege of Vienna 14 

The War of the Spanish Succession 14 

The Pragmatic Sanction and the War of the Austrian 

Succession, 1740-48 15 

THE REFORMS OF MARIA THERESA AND 

JOSEPH II 16 

Baroque Absolutism and Enlightened Despotism .... 16 

The Strategic Impact of the Reform Era 17 

THE HABSBURG EMPIRE AND THE FRENCH 

REVOLUTION 18 

The Napoleonic Wars 18 

The Congress of Vienna 19 



vii 



AUSTRIA IN THE AGE OF METTERNICH 21 

International Developments, 1815-48 21 

Domestic Policies 21 

THE REVOLUTION OF 1848 AND NEOABSOLUTISM . . 22 

Revolutionary Rise and Fall 22 

The Failure of Neoabsolutism 24 

Loss of Leadership in Germany 25 

AUSTRIA-HUNGARY TO THE EARLY 1900s 26 

The Founding of the Dual Monarchy 26 

Final Defeat in Germany and Reconciliation 

with Prussia 27 

The Eastern Question 29 

Internal Developments in Austria 30 

THE FINAL YEARS OF THE EMPIRE AND WORLD 

WAR I 33 

The Crisis over Bosnia and Hercegovina 33 

World War I 33 

The End of the Habsburg Empire and the Birth 

of the Austrian Republic 35 

THE FIRST REPUBLIC 35 

Overview of the Political Camps 35 

The Foundation of the First Republic 38 

Political Life of the 1920s and Early 1930s 39 

The End of Constitutional Rule 41 

Growing German Pressure on Austria 43 

THE ANSCHLUSS AND WORLD WAR II 44 

Absorption of Austria into the Third Reich 44 

Nazi Economic and Social Policies 45 

Repression and Compliance 47 

World War II and the Defeat of Nazi Germany 47 

RESTORED INDEPENDENCE UNDER ALLIED 

OCCUPATION 48 

Foundation of the Second Republic 48 

Four Power Occupation and Recognition of the 

Provisional Government 50 

The 1945 Election and Consolidation of the 

Austrian Government 51 

Consolidation of Democracy 52 

Austria's Integration with the West 54 

The 1955 State Treaty and Austrian Neutrality 55 

THE GRAND COALITION AND THE AUSTRIAN 

PEOPLE'S PARTY CODA, 1955-70 56 

Foreign Policy in the Late 1950s and the 1960s 56 

Elections and Parties 58 



Vlll 



Domestic Tranquillity under the Grand Coalition .... 59 

THE KREISKY YEARS, 1970-83 60 

Electoral Politics in the Kreisky Era 60 

Domestic Issues 61 

Foreign Policy 62 

End of the Kreisky Era 63 

Chapter 2. The Society and Its Environment 65 

Lonnie Johnson 

GEOGRAPHY 69 

Landform Regions 70 

Human Geography 73 

Climate 75 

Ecological Concerns 76 

AUSTRIAN NATIONAL IDENTITY 78 

DEMOGRAPHY 80 

Demographic Development 80 

Immigration 83 

Emigration 86 

SOCIAL MINORITIES 86 

Official Minority Groups 87 

Other Minorities 89 

Attitudes Toward Minorities 93 

SOCIAL STRUCTURE 94 

FAMILY LIFE 96 

Family Developments after the 1960s 96 

Status of Women 99 

RELIGION 101 

EDUCATION 104 

SOCIAL SECURITY 109 

Employment, Unemployment, and Pension 

Benefits 110 

Health and Health Insurance Ill 

Family Benefits 113 

HOUSING 114 

Chapter 3. The Economy 117 

W.R. Smyser 

ECONOMIC GROWTH AND GOVERNMENT 

POLICY 121 

Historical Background 121 

Developments During the 1970s and 1980s 126 

The New Policies 127 



IX 



The Magic Pentagon 130 

The Subsidy Policy 130 

Foreign Workers in Austria 132 

PRINCIPAL ECONOMIC INTEREST GROUPS 133 

The Chambers of Commerce 134 

The Chambers of Agriculture 134 

The Chambers of Labor 135 

The Professions 135 

The Austrian Trade Union Federation 136 

Works Councils 137 

The Federation of Austrian Industrialists 137 

SOCIAL PARTNERSHIP 138 

STRUCTURE OF THE ECONOMY 140 

The Agricultural Sector 143 

The Industrial Sector 146 

Energy 149 

The Services Sector 150 

FOREIGN ECONOMIC RELATIONS 159 

Foreign Trade and the Balance of Payments 159 

Austria and European Integration 160 

Openings Toward the East 162 

Chapter 4. Government and Politics 165 

John F. Schaettler 

CONSTITUTIONAL FRAMEWORK 168 

GOVERNMENT INSTITUTIONS 171 

The Federal President 172 

Chancellor and Cabinet 174 

Nationalrat 175 

Bundesrat 179 

Bundesversammlung 179 

Judicial System 180 

Civil Service 183 

Provincial Government 184 

Local Government 185 

Electoral System 186 

POLITICAL DYNAMICS 188 

The Social Democratic Party of Austria 190 

The Austrian People's Party 194 

The Freedom Party of Austria 197 

The Green Parties 200 

Political Developments since 1983 202 



x 



MASS MEDIA 210 

Newspapers and Periodicals 210 

Radio and Television 212 

FOREIGN RELATIONS 213 

Foreign Policy During the Kreisky Era 213 

New Focus on Europe 216 

Regional Issues 219 

Chapter 5. National Security 221 

Jean R. T artier 

HISTORICAL BACKGROUND 224 

The Habsburg Military 224 

Two World Wars, 1914-18 and 1939-45 226 

STRATEGIC CONCEPTS AND MISSIONS OF THE 

AUSTRIAN ARMED FORCES 228 

NEUTRALITY AND THE ARMED FORCES 232 

NATIONAL DEFENSE 233 

Army 235 

Personnel, Conscription, Training, and Reserves .... 237 

Army Equipment 241 

Air Force 242 

Uniforms, Ranks, and Insignia 244 

Military Justice 245 

The Defense Budget 247 

Domestic and Foreign Sources of Military 

Equipment 248 

INTERNAL SECURITY 249 

Penal Codes 252 

Criminal Court Proceedings 253 

Police 253 

Incidence of Crime 257 

Penal System 257 

Appendix. Tables 261 

Bibliography 273 

Glossary 287 

Index 291 

Contributors 311 

List of Figures 

1 Administrative Divisions of Austria, 1993 xx 

2 Europe in the Sixteenth Century 10 



xi 



3 Austrian Empire, 1815 20 

4 Austria-Hungary, 1867-1918 28 

5 Topography and Drainage 72 

6 Population by Age and Gender, 1990 82 

7 Population by Age and Gender, Projected 2020 84 

8 Structure of the Education System, 1993 108 

9 Economic Activity, 1993 148 

10 Transportation System, 1993 154 

11 Structure of Government, 1993 172 

12 Organization of National Defense, Planned 1995 236 

13 Major Military Installations, Planned 1995 238 

14 Military Ranks and Insignia, 1993 246 



xii 



Preface 



Like its predecessor, this study attempts to review the history 
and treat in a concise and objective manner the dominant social, 
political, economic, and military aspects of Austria. Sources of in- 
formation included books, scholarly journals, foreign and domes- 
tic newspapers, official reports of government and international 
organizations, and numerous periodicals on Austrian and inter- 
national affairs. Chapter bibliographies appear at the end of the 
book, and brief comments on some of the more valuable sources 
recommended for further reading appear at the end of each chap- 
ter. A glossary also is included. 

Spellings of place-names used in the book are in most cases those 
approved by the United States Board on Geographic Names. Ex- 
ceptions are the use of Vienna rather than Wien, Danube rather 
than Donau, Lake Constance rather than Bodensee, and the En- 
glish names of four Austrian provinces rather than their German 
names: Carinthia rather than Karnten, Lower Austria rather than 
Niederosterreich, Styria rather than Steiermark, and Upper Aus- 
tria rather than Oberosterreich. 

Measurements are given in the metric system. A conversion ta- 
ble is provided to assist readers unfamiliar with metric measures 
(see table 1, Appendix). 

The body of the text reflects information available as of Decem- 
ber 31, 1993. Certain other portions of the text, however, have 
been updated. The Introduction discusses significant events that 
have occurred since the completion of the research, the Country 
Profile and Glossary include updated information as available, and 
the Bibliography lists recently published sources thought to be par- 
ticularly helpful to the reader. 



xiii 



Country Profile 




Country 

Formal Name: Republic of Austria. 
Short Form: Austria. 
Term for Citizens: Austrian(s). 
Capital: Vienna. 

NOTE — The Country Profile contains updated information as available. 



XV 



Geography 

Size: Approximately 83,859 square kilometers. 

Topography: Most of country Alpine or sub- Alpine; heavily wood- 
ed mountains and hills cut by valleys of fast-flowing rivers. Plains 
around Vienna and Danube Valley in northeast only lowland areas 
and contain most of population. Danube, flowing east through 
northern provinces and Vienna, principal river. Of total area, 20 
percent arable land, 29 percent pasture, 44 percent forest, and 7 
percent barren. 

Climate: Continental weather systems predominate; temperatures 
and rainfall vary with altitude. Temperate, cloudy, cold winters 
with frequent rain in lowlands and snow in mountains; cool sum- 
mers with occasional showers. Humidity highest in wetter western 
regions, diminishing toward east. 

Society 

Population: In May 1991 census, population 7,795,786. 

Language: Of native-born population, 99 percent German- speaking 
with small minorities speaking Serbo-Croatian or Slovenian. 

Religion: Of native-born and foreign-born population combined, 
about 78 percent Roman Catholic, 5 percent Protestant, 8 percent 
other (includes Jewish, Muslim, and Orthodox), and 9 percent no 
denomination. 

Education: Public elementary, secondary, and higher education 
free; nine years compulsory. By ninth year, students usually in 
preuniversity academic schools or vocational education. Literacy 
99 percent for population over age fifteen. 

Health and Welfare: Social insurance covers all wage-earners and 
salaried employees, self-employed workers, and dependents. Cover- 
age compulsory. State-required health insurance covers 99 percent 
of population. In 1990 average life expectancy almost seventy-six 
years (seventy-two for males and seventy-nine for females). 

Economy 

Gross National Product (GNP): US$174.8 billion in 1992 with 
2 percent growth rate; US$22,110 per capita with 2.4 percent 
growth rate. 

Agriculture and Forestry: Agriculture and forestry accounted for 
2.8 percent of gross domestic product (GDP) and 7.4 percent of 



xvi 



labor force in 1991. Principal crops: grains, fruit, potatoes, sugar 
beets, sawn wood, cattle, pigs, and poultry. About 80 to 90 per- 
cent self-sufficient in food. 

Industry: Major sector with 36.3 percent of GDP and 36.9 per- 
cent of employment in 1991. 

Services: Services accounted for 60.9 percent of GDP and 55.8 
percent of employment in 1991 . Largest growth sector; 10 percent 
growth in share of GDP and 1 4 percent growth in share of labor 
force since 1970. 

Major Trading Partners: Most trade with European Union (EU). 
Germany largest single trading partner (in 1993 accounted for 38.9 
percent of exports and 41.5 percent of imports), followed by Italy 
and Switzerland. 

Imports: US$48.6 billion in 1993. Major imports: machinery and 
equipment, manufacturing products, chemical products, fuels and 
energy, and foodstuffs. 

Exports: US$40.2 billion in 1993. Major exports: machinery and 
equipment, paper and paper products, transport equipment, metal 
manufactures, and textiles and clothing. 

Balance of Payments: Current account deficit US$900 million in 
1993. Persistent trade deficit. Per capita income from tourism highest 
in world; helps balance deficit. 

General Economic Conditions: Stable economy with generally good 
rates of growth; high living standards, comparable with other coun- 
tries of Western Europe. In 1992 real GDP growth 1.6 percent, in- 
flation 4.1 percent, and unemployment 5.9 percent; in 1993 real 
GDP growth -0.3 percent, inflation 3.6 percent, and unemploy- 
ment 6.8 percent. 

Currency and Exchange Rate: Schilling. In March 1994, exchange 
rate US$1 = S12.1. 

Transportation and Communications 

Railroads: 6,028 kilometers total (94 percent standard-gauge 1.435 
meter and 6 percent 0.760 meter), of which about 5,388 kilometers 
state owned and 640 kilometers privately owned. 

Highways: As of December 1992, 108,000 kilometers of roads, of 
which about 1,800 kilometers major highways, 9,900 kilo- 
meters main roads, and 25,900 kilometers secondary roads. 



xvn 



Inland Waterways: More than 350 kilometers, carrying approx- 
imately one-fifth of total trade. Danube River only navigable water- 
way with barges carrying up to 1,800 tons; important connection 
with North Sea, Germany, and Black Sea. 

Ports: Vienna major river port. 

Civil Airports: Fifty-five total; twenty with permanent- surface run- 
ways. Main international airport at Vienna-Schwechat, southeast 
of Vienna; international flights also from Graz, Innsbruck, Klagen- 
furt, Linz, and Salzburg. 

Telecommunications: Highly developed and efficient system with 
4 million telephones, twenty-seven radio stations, forty-seven tele- 
vision stations, and four satellite ground stations. 

Government and Politics 

Government: Federal republic with nine provinces, each with own 
assembly and government. 1920 constitution, revised 1929, forms 
constitutional basis of government. Government consists of execu- 
tive, legislative, and judicial branches. President head of state, elected 
every six years by popular vote. Executive headed by chancellor 
(prime minister) and cabinet, which reflect party composition of 
parliament. Legislative power vested in bicameral parliament con- 
sisting of Nationalrat (National Council) and Bundesrat (Federal 
Council). Nationalrat primary legislative power, with 183 popularly 
elected members; Bundesrat represents the provinces with sixty- three 
members elected by provincial assemblies. Independent judiciary. 

Legal System: Supreme Court for civil and criminal cases, Adminis- 
trative Court for cases involving administrative agencies, and Consti- 
tutional Court for constitutional cases. Four higher provincial courts, 
seventeen provincial and district courts, and numerous local courts. 

Politics: Dominated by Social Democratic Party of Austria (Sozial- 
demokratische Partei Osterreichs — SPO) and Austrian People's 
Party (Osterreichs Volkspartei — OVP); government coalition of 
these two parties since 1987. Freedom Party of Austria (Freiheit- 
liche Partei Osterreichs — FPO) gaining strength despite split in early 
1993 with formation of The Liberal Forum (Das Liberale Forum). 
Environmentalists also represented in parliament. 

Foreign Relations: Founding member of European Free Trade 
Association (EFT A) and member of United Nations (UN) and 
European Economic Area (EEA). Admission into European Union 
(EU) expected in January 1995. 



xvin 



National Security 

Armed Forces: In 1994 defense forces consisted of 51,250 troops, 
of which 44,000 were in Bundesheer (Federal Army; including 
19,500 conscripts) and 7,250 in air force (including 2,400 con- 
scripts). No women serve in armed forces. 

Treaty Commitments: State Treaty of 1955 prohibits union with 
Germany. Constitutional Law of October 26, 1955, declares per- 
manent neutrality, rejects participation in any military alliance, 
and prohibits establishment of any foreign military base on terri- 
tory. 

Conscription and Reserves: Males obliged to perform total of six 
months of active duty and two months of reserve training (or eight 
months of active duty with no reserve training). Ready reserves 
(ready within seventy-two hours) 1 19,000 in 1994. Each year 66,000 
receive refresher training. Additional 960,000 under age fifty with 
reserve training (all ranks). 

Standing Forces: According to The Military Balance, 1994-1995, 
army consists of three corps (one organized as mechanized divi- 
sion consisting of three armored infantry brigades) and one provin- 
cial military command. Air force (part of Bundesheer) has one air 
division headquarters, three air regiments, and three air defense 
battalions. Reorganization of Bundesheer under New Army Struc- 
ture to be completed in 1995. 

Troops Abroad: In 1994 Austrian military troops serving in UN 
peacekeeping forces included deployment in Cyprus, Golan Heights, 
Iraq-Kuwait border, and Rwanda. 

Sources of Equipment: Heavily dependent on foreign suppliers: 
United States, 29 percent; Western Europe, excluding Germany, 
67 percent. State Treaty precludes arms imports from Germany. 
Sweden primary source of aircraft and missiles. 

Defense Expenditures: In 1993 defense budget US$1.63 billion, 
lowest proportion of GNP (1 to 2 percent) in Europe, except for 
Luxembourg. 

Internal Security: Most important law enforcement agencies part 
of national government and organized by Ministry for Interior. 
Federal Police, oriented to urban areas; Gendarmerie, responsi- 
ble for rural areas and towns without federal or local contingent; 
State Police, concerned with counterterrorism and counterintel- 
ligence. 



xix 




s 



xx 



Introduction 



THE AUSTRIAN PEOPLE ENDURED a series of political, so- 
cial, and economic upheavals between the outbreak of World War 
I and the division of Europe into two hostile blocs shortly after 
World War II. In the next few decades, however, they succeeded 
in establishing a prosperous and stable democracy. Indeed, they 
were so successful that by the 1970s Austria had come to be wide- 
ly characterized as "an island of the blessed" because of the material 
well-being of its people and the virtual absence of social conflict. 

Devised in the first decade after War World II, the system of 
governing — the social partnership — that made this achievement pos- 
sible gave each of Austria's main social groups a decisive say in 
the management of the country's affairs. In marked contrast to 
the social tensions of the interwar period, which culminated in a 
brief civil war in 1934, in the postwar era the representatives of 
agriculture, commerce, and labor were able to work together har- 
moniously for the benefit of all. By the 1990s, the decades of 
prosperity engineered through the system of social partnership had 
given Austrians one of the world's highest living standards. Sus- 
tained prosperity and social peace yielded yet another achievement, 
the creation of a viable nation supported by the overwhelming 
majority of its citizens. Thus, the Austrian state assembled out of 
the ruins of the Habsburg Empire at the end of World War I — 
said by many to be "the state no one wanted" — was replaced by 
one that gradually won the allegiance of its citizens by providing 
them with a long period of uninterrupted peace and prosperity. 

At the beginning of the twentieth century, the territory occupied 
by present-day Austria had been ruled by the Habsburg Dynasty 
for more than 600 years. This territory was the core of an empire 
that at its height in the sixteenth century included Spain and its 
colonies in the New World, and much of Italy and the Low Coun- 
tries. Although a military defeat at the hands of Prussia in 1866 
had weakened Emperor Franz Joseph I (r. 1848-1916) and had 
obliged him to make such significant concessions to his Hungari- 
an subjects the following year that the lands he ruled came to be 
known as Austria-Hungary (also seen as the Austro-Hungarian Em- 
pire), his empire remained one of Europe's great powers. In the 
last decades of the nineteenth century, it allied itself with Germany 
and Italy and in the years leading up to World War I actively pur- 
sued an aggressive foreign policy to extend Habsburg influence far- 
ther south in the Balkans. 



xxi 



The Habsburg Empire was supranational in nature. Many eth- 
nic groups lived within its boundaries, including Germans, Czechs, 
Slovaks, Poles, Hungarians, Slovenes, Croats, Serbs, and Roma- 
nians. Most of the empire's German-speaking subjects lived in the 
territory that makes up present-day Austria, but significant num- 
bers also lived in Bohemia, Moravia, and Silesia, and smaller num- 
bers were found throughout the empire. Although the Hungarians 
had been granted the right to govern themselves and to have a sig- 
nificant say in determining the empire's affairs, German speakers 
remained dominant within the empire. Their dominance had gone 
on for centuries, although they made up only one-fourth of the 
population. Perhaps owing to their privileged status, the German 
speakers were more loyal to the empire than any other ethnic group. 
They did not see themselves as Austrian, however, but instead felt 
a strong local patriotism for their native provinces. They also 
thought of themselves as belonging to the German cultural com- 
munity, a community found not only in Austria but also in Ger- 
many and Switzerland, and anywhere else German was spoken. 

Germany's unification in 1871 under Prussian leadership after 
many centuries of division was only the most notable result of the 
powerful force of nationalism that appeared in many areas of Eu- 
rope in the nineteenth century. Just to the south of the Habsburg 
Empire, for example, the many small states of the Italian penin- 
sula had come together to form a united Italy. The nationalist ideal 
also came to touch with an ever-growing strength many of the peo- 
ples living within the Habsburg Empire. It was an ideal complete- 
ly at variance with the supranational foundations of the empire and 
would in the end lead to its destruction. As nationalism gained in 
influence, growing numbers of the empire's inhabitants came to 
believe that they more rightly owed allegiance to their own ethnic 
group than to a ruling elite speaking a different language. 

In response to the nationalist movements emerging within 
Austria-Hungary, the empire's German speakers formed their own 
political groups, often described as German nationalist-liberal, to 
protect their rights. Because the German-speaking community re- 
mained loyal to Emperor Franz Joseph, few of its members wished 
to see the areas in which they lived secede from the empire and 
become part of the newly united and powerful Germany. Their 
aims were to maintain their privileged position within the empire 
and to ensure that the German language did not lose ground to 
the empire's other languages. 

In addition to the German nationalist-liberal parties active in 
the late nineteenth century, German speakers created political par- 
ties that had other goals. The Social Democratic Workers' Party 



xxn 



and the Christian Social Party were the most important political 
parties. The former sought to establish a socialist society based on 
Marxist principles. The latter sought to improve society, particu- 
larly (but not exclusively) rural society, by emphasizing Christian 
values and traditions. Because the memberships of both parties were 
largely German speaking, they had some sympathy with the aims 
of the empire's German nationalists. Their main concerns, however, 
were elsewhere. 

World War I was set off by the June 1914 assassination of Arch- 
duke Franz Ferdinand, heir to the Habsburg throne, by Serbian 
nationalists. Within weeks, a system of interlocking alliances set 
the Great Powers of Europe against one another. By the war's end 
in November 1918, the Habsburg Empire had ceased to exist. Some 
of the empire's ethnic groups formed new nations. A German Aus- 
trian state was established on October 21, 1918. On November 
12, 1918, one day after the war ended, the new state was declared 
a republic. 

The new Austrian state was only one-fourth as large as the em- 
pire. In the eyes of many of its citizens, it was a mere "rump state" 
and was neither economically nor socially viable. Many argued that 
it logically should be part of Germany. The war's victors — the 
United States, Britain, and France — feared such a union would 
strengthen Germany, and they prohibited it. They also required 
that the new state be called the Republic of Austria rather than 
the German Austrian Republic. Despite the Allied prohibition, 
desire for union with Germany remained strong in Austria, par- 
ticularly among German nationalist-liberals and socialists. 

Shorn of many of the traditional economic connections it had 
had within the empire, Austria was poorly positioned to prosper. 
Its struggling economy was also hurt by the European economic 
slump of the early 1920s. The new republic's economic troubles 
diminished the support it needed from its citizens to survive. Rather 
than joining together to build a nation, Austrians sought social and 
economic security by withdrawing into the three large social groups, 
or camps {Lager), that predated the war: German nationalist-liberal, 
socialist, and Christian Social. Austrians usually gave their loyalty 
to the Lager in which they were born rather than to the country 
as a whole. Each Lager maintained a network of organizations such 
as credit unions, sports clubs, home mortgage funds, and the like 
that ministered to the economic and social needs of its members. 
Thus, contact among Austrians of different social backgrounds was 
lessened. 

The hostility the groups felt for one another increased their in- 
ner cohesion. Socialist plans to establish a society founded on 



xxiii 



Marxist principles frightened the right-wing German nationalist- 
liberals and Christian Socials and heightened their determination 
to defend their property. Socialist and German nationalist-liberal 
anticlericalism caused Christian Socials to be more resolute in 
defending their religious values. German nationalist-liberal and 
Christian Social anti-Semitism caused many Austrian Jews to be- 
come active in the socialist movement. This in turn meant that 
many on the right came to hate socialism even more because they 
saw it as a Jewish-controlled conspiracy to subvert all cherished 
values. 

In response to the animosity the Lager felt for one other, armed 
militias were soon formed. The right-wing militia joined at times 
with state forces to oppose the socialists. Organized violence be- 
came frequent as the Christian Socials combined with the German 
nationalist-liberals to exclude socialists from the national govern- 
ment. Socialists governed only in Vienna. The many leftist social 
measures they enacted in "Red Vienna" further hardened con- 
servative opposition. 

A failed uprising in February 1934, in which the socialists sought 
to stand up to the central authorities, marked the definitive end 
of Austrian parliamentary democracy, already partially suspend- 
ed the previous year. The Christian Social Engelbert Dollfuss es- 
tablished a right-wing authoritarian regime that attempted to govern 
Austria according to Christian principles. Austrian National So- 
cialists, or Nazis, who desired to unite Austria with Germany, then 
ruled by Adolf Hider, assassinated Dollfuss in July 1934. They were 
not strong enough to seize power, however, and the Dollfuss re- 
gime continued under the leadership of Kurt von Schuschnigg. 

Despite the failed Nazi coup d'etat, agitation for annexation, 
or Anschluss, of Austria by Germany continued. Schuschnigg resist- 
ed Hitler's demands for Anschluss for a time, but in March 1938 
German troops occupied Austria. Because most Austrians felt lit- 
tle loyalty to their country, its seizure by Germany was widely sup- 
ported, even by many socialists. 

Austria was quickly and thoroughly absorbed by Nazi Germa- 
ny. The country's new rulers attempted to expunge all traces of 
an independent Austria by ruthless personnel and administrative 
practices. Even the name Austria was replaced by a new designa- 
tion — Ostmark. Austrians were drafted into the German army, the 
Wehrmacht, and when World War II began, they fought until Ger- 
many's unconditional surrender in May 1945. 

Austria's human and material losses from the war were great. 
Furthermore, the country was divided into four zones, each oc- 
cupied by one of the victorious Allies: the United States, Britain, 



xxiv 



France, and the Soviet Union. Under the watchful eyes of the oc- 
cupation powers, Austrians reestablished a government based on 
the constitution of 1920, as amended in 1929. This second attempt 
of Austrians to govern themselves in a parliamentary democracy 
proved eminently successful. In what came to be called the Second 
Republic, Austrians enjoyed a long period of social peace and 
prosperity. 

A key reason for the success of the Second Republic was the 
manifest failure of the First Republic (1918-38). Confronted with 
a defeat of this magnitude, Austrian politicians vowed not to repeat 
the mistakes of the earlier period. Leaders of opposing parties im- 
prisoned together in Nazi concentration camps discussed what was 
needed to rebuild their country and agreed to play down the ideo- 
logical differences that had made interwar politics so bitter. In ad- 
dition, Nazi barbarities gave them good reason to emphasize what 
distinguished Austria from Germany. 

External forces also contributed to the eventual success of the 
Second Republic. The occupation of Austria by foreign troops and 
the need to resist their demands encouraged a new Austrian uni- 
ty, as opposed to the lethal divisiveness of the First Republic. Fur- 
thermore, the gradual extinguishing of political freedom in Eastern 
Europe in the first years after World War II made the principles 
of parliamentary democracy more attractive than they had been 
in the interwar period. The Soviet Union's practices in its occu- 
pation zone were a daily affront to Austrians and discredited po- 
litical groups not committed to parliamentary democracy. In the 
interwar period, in contrast, no political party had fully supported 
this form of government, and several had been actively opposed 
to it. 

In addition to failing to establish a working democracy during 
the First Republic, Austrians also had failed to put in place a na- 
tion supported by most of its citizens. During the Second 
Republic — likewise born in defeat at the end of a world war — a 
stable, prosperous society was created that with time engendered 
in its members a sense of pride in their Austrian identity. This feel- 
ing of a national identity was new. As late as 1956, only 49 per- 
cent of Austrians believed that they constituted a nation, whereas 
46 percent saw themselves as Germans. Several decades of success 
as a nation altered the views of most Austrians on this matter. An 
opinion poll in 1989, for example, found that 78 percent of Aus- 
trians agreed that they constituted a nation, and only 9 percent 
held that they did not. 

After World War I, Austria's economy floundered for a time, 
improved in the second half of the 1920s, then collapsed with the 



xxv 



onset of the Great Depression. In contrast to this failure, after World 
War II an initial period of hardship was followed by decades of 
economic growth, which has continued into the 1990s. 

In the first years after World War II, Austrians nationalized a 
large portion of their economy to protect it from foreign seizure, 
particularly by the Soviet Union. They also worked out mechan- 
isms to involve the main participants in the economy — agriculture, 
commerce, and labor — in determining democratically how the econ- 
omy was to be managed. During the 1950s and 1960s, further 
bargaining institutions were created, most notably the Parity Com- 
mission for Prices and Wages, that involved economic interest 
groups and the government in major economic decisions. The 
resulting system, the social partnership, is responsible for the ex- 
tremely low incidence of strikes in Austria and the sustained sta- 
bility crucial for economic growth. 

The economy fostered by the social partnership has grown stead- 
ily in the postwar period, often at growth rates above the Organi- 
sation for Economic Co-operation and Development (OECD — see 
Glossary) average. Between 1955 and 1990, the economy increased 
in size by two-and-one-half times. In step with the rest of Western 
Europe, the Austrian economy modernized quickly. Agriculture, 
still a significant part of the economy in the 1950s, by the early 
1990s provided only about one-twentieth of the work force with 
employment and accounted for an even smaller share of the gross 
domestic product (GDP — see Glossary). In 1970 the industrial sec- 
tor and the services sector accounted for roughly equal shares of 
GDP; by the 1990s the latter had become twice the size of the former 
and provided jobs for more than half the work force. 

Although Austrian industry has a smaller place in the overall 
economy than it did earlier in the postwar period, it has become 
more specialized and produces high-quality goods that are com- 
petitive on the world market. Despite its small size, Austria is an 
active participant in the global economy, and foreign trade, two- 
thirds of it with the European Union (EU — see Glossary), accounts 
for two-fifths of GDP. A persistent trade deficit is largely offset 
by high earnings from tourism. Austria's place in the global econ- 
omy has made imperative its membership in international economic 
organizations, such as the European Free Trade Association 
(EFTA — see Glossary) and the European Economic Area (EEA — 
see Glossary). Austria is scheduled to become a member of the EU 
on January 1, 1995. 

The expanding economy has brought higher living standards for 
nearly all Austrians. Automobile ownership and travel abroad are 
commonplace, and an ever- widening range of state- supervised social 



xxvi 



benefits has made material want a thing of the past for ordinary 
Austrians. Sustained prosperity and a modernizing economy have 
permitted many Austrians to find better employment than did their 
parents. White-collar salaried employees now outnumber blue-collar 
workers. Much of the menial work is done by foreigners, who first 
began to arrive in significant numbers in the early 1960s and who 
at times have made up nearly 10 percent of the work force. 

The great increase in white-collar employment permitted a ten- 
fold increase in the number of Austrians enrolled at institutions 
of higher learning between the mid-1950s and the early 1990s. The 
upgrading of education at lower levels, such as specialized voca- 
tional training, is also impressive. As a result, many Austrians who 
themselves attended only elementary school have seen their chil- 
dren receive an education that results in well-paid skilled em- 
ployment. 

Social mobility has eroded the interwar division of Austria into 
Lager. The farming sector has dwindled into insignificance. The 
traditional blue-collar working class has diminished both in size 
and in cohesion as workers have become more middle class in their 
habits and expectations because of improvements in their hous- 
ing, working conditions, and general standard of living. Many of 
their children have entered the ever-expanding middle class, which 
is no longer closed to outsiders. Younger Austrians, growing up 
in a more prosperous and egalitarian society than their parents, 
not only earn their livelihood in new ways but also have different 
social and political attitudes than the older generation. 

In the decades after World War II, Austrian society has become 
more secularized. Regular church attendance has declined sharp- 
ly, although the number of Austrians who have officially withdrawn 
from the Roman Catholic Church in this overwhelmingly Roman 
Catholic country has increased only slightly. The church itself has 
changed, withdrawing from the active and polarizing role it played 
in the interwar period. It speaks out only on issues it regards as 
within its legitimate sphere of interest. One such issue has been 
abortion. In the early 1970s, the church waged an ultimately un- 
successful campaign against the legalization of abortion. 

The role of women also has changed in this new social environ- 
ment. The so-called three Ks of Kinder, Kirche, and Kiiche (children, 
church, and kitchen) no longer dominate women's lives to the ex- 
tent they did in the past. Marriage is no longer seen as the only 
socially acceptable goal of a woman's life. Families are smaller, 
and by the 1990s the birthrate was below that needed for the popu- 
lation to increase. Divorce is more frequent, as is cohabitation by 
unmarried couples. The number of illegitimate births also has risen, 



xxvn 



although most of these children are subsequently legitimized by 
marriage. 

Women now work outside the home in greater numbers than 
in the past. Although as of the first half of the 1990s women still 
earned less than men at all levels of employment, more women 
than ever before hold responsible positions. Some of the country's 
foremost politicians are women, and the number of seats held by 
women in the nation's lower house of parliament, the Nationalrat 
(National Council), increased from eleven in 1970 to thirty-nine 
in 1994. Laws have been passed to improve women's position in 
society. The Equal Treatment Law of 1979 mandates equal pay 
for equal work, and the Women's Omnibus Law of 1993 aims at 
increasing the employment of women in government agencies. 

The economic and social changes Austria underwent in the post- 
war era began to affect the country's political life only in the se- 
cond half of the 1980s. It was during this period that the dominance 
of political life by two large parties — a dominance that began im- 
mediately after World War II — began to be threatened by several 
smaller parties. Representing two of the country's three tradition- 
al social camps, the two parties are the Socialist Party of Austria, 
known since 1991 as the Social Democratic Party of Austria (Sozi- 
aldemokratische Partei Osterreichs — SPO), the successor to the So- 
cial Democratic Workers' Party, and the Austrian People's Party 
(Osterreichische Volkspartei — OVP), descended from the Chris- 
tian Social Party. 

The SPO and OVP have governed Austria since 1945, often 
together in coalition governments. The latest of these so-called grand 
coalitions was formed in November 1994. Until 1970 the OVP was 
generally the stronger of the two parties. In that year, however, 
the SPO was led to power by the able and extremely popular Bru- 
no Kreisky, who remained chancellor until 1983. In 1986 another 
effective leader, Franz Vranitzky, took over the SPO and through 
his personal popularity has been able keep the party in power, even 
though the party's share of the vote has declined steadily. 

However strong their political rivalry may be, both parties are 
committed to democracy, and they have adopted less ideological 
positions than did their predecessors in the interwar period. De- 
cades of governing together have reduced the ideological differ- 
ences between the two parties, and both support maintaining 
Austria's mixed economy and social welfare state. They have also 
been bound together by the elaborate patronage system of divid- 
ing between them the right to fill many positions in government 
agencies, in the extensive social welfare system, in the numerous 
bodies that make up the social partnership system, and in the large 



xxvin 



state-owned business enterprises. Because appointments to these 
positions often depend more on party membership than on qualifi- 
cations, there have been instances of corruption and incompetence. 

As an indication of the overall success of the SPO and OVP in 
governing Austria in the postwar era, only in 1990 did their joint 
share of the vote in a national election drop below 80 percent. In 
fact, in many national elections their joint share had been over 90 
percent. Beginning in 1986, however, their support began to fall 
steadily. In the national election of October 1994, they received 
only 62.6 percent of the vote. The decline stems in part from the 
slow breakup of the Lager, which had loyal voting habits, and the 
emergence of a sizable pool of ' 'floating voters, ' ' no longer invari- 
ably tied to the SPO or to the OVP. 

The decline of the large parties also stems from voter dissatis- 
faction with the inefficiency and corruption of traditional political 
practices of governing the country and the emergence of new is- 
sues in a rapidly changing economy and society. The most serious 
challenger to the two main parties is a right-wing populist party 
formed in 1956, the Freedom Party of Austria (Freiheitliche Par- 
tei Osterreichs — FPO), descended from prewar German nationalist- 
liberal groups. The party had seemed doomed to extinction until 
a young politician, Jorg Haider, seized control of it in 1986 and 
through his dynamic leadership increased its share of the vote to 
9.7 percent in that year's national election. The FPO nearly dou- 
bled its share in the national election of 1990 and won 22.5 per- 
cent of the vote in the national election of October 1994. This last 
victory occurred despite a split within the FPO in early 1 993 , when 
some of its members left to form a new party, The Liberal Forum 
(Das Liberale Forum). These members disagreed with Haider's 
position on foreigners in Austria and his departure from classic po- 
sitions of European liberalism. 

A superbly gifted politician, Haider has campaigned as a con- 
servative populist, speaking out against the SPO-OVP decades- 
long stewardship of the country's affairs. He has exploited the anger 
of many voters at the pervasive cronyism and corruption of the 
SPO-OVP coalition and promised to end its system of patronage. 
Despite his clearly expressed hostility to socialism and the role of 
government in general, he has been able to successfully court many 
blue-collar SPO voters worried by the challenges posed to their 
country's small economy by a united Europe. With what many 
regard as demagogy, he has won votes by addressing that portion 
of the electorate who are concerned about the foreign presence in 
Austria and who fear Uberfremdung, that is, Austria's submersion in 



xxix 



a flood of foreign immigrants fleeing the social and economic chaos 
of Eastern Europe. 

Traditional politics has also been challenged by the emergence 
of an environmentalist movement. Widespread economic security 
has freed young Austrians from immediate practical concerns and 
has allowed them to become concerned with longer-term issues such 
as protection of the environment. Galvanized by the construction 
of a large SPO-sponsored nuclear power plant in 1978, citizen 
groups focusing on the environment were formed; shortly there- 
after, several environmentalist parties were established. In 1986 
environmentalists were first elected to the Nationalrat; they have 
increased their share of the vote in each national election since. 
In the national election of 1994, the largest environmentalist party, 
The Greens (Die Griinen), won thirteen seats. 

The European trend toward unification has also altered Austri- 
an politics. In the first half of the 1990s, Austria's possible mem- 
bership in the EU was likely the issue of greatest significance for 
the country's future. In 1989 Austria applied for admission to the 
European Community (EC — see Glossary), the predecessor of the 
EU. An interim step before admission was the January 1994 en- 
try into the EE A. After years of negotiations with EC officials, in 
which the central points were protection of the environment, for- 
eign ownership of real estate property, and farm subsidies, the 
SPO-OVP government called for a June 1994 referendum about 
EU membership. 

The referendum was hotly contested. Although 66.4 percent of 
the electorate voted in favor of EU membership, the outcome of 
the vote was uncertain until the end. In addition to the SPO-OVP 
coalition, The Liberal Forum also supported membership. The most 
eloquent spokesman for this position was the minister for foreign 
affairs, Alois Mock, who had conducted the difficult negotiations 
concerning the conditions under which Austria would join the EU. 
In the late 1980s, Mock had persuaded his party, the OVP, that 
it should advocate Austria's becoming part of a united Europe. 
The SPO gradually came to the same view, even though EU mem- 
bership would conflict with Austria's traditional neutrality. The 
EU has as a long-term goal not only economic unity but also a 
common foreign and security policy, which would by its nature 
preclude neutrality. Proponents of EU membership argued that 
it would bring economic benefits and contribute to the nation's 
security in a new and rapidly changing world. 

Opponents of EU membership included many Austrian intellec- 
tuals, environmentalists, and the FPO, which had reversed its previ- 
ously positive stance. Opponents argued that membership would 



xxx 



bring a loss of Austrian sovereignty and that bureaucrats in Brus- 
sels would come to exert a suffocating control over the country's 
affairs. They feared that Austria's national identity might gradu- 
ally be lost in a united Europe, given the country's small size. 
Haider justified his party's change of opinion by saying that it still 
desired European unity, but not one in which Austrian liberty was 
so restricted. 

The overwhelming support voters gave to EU membership was 
a win for the coalition, but support came from many sectors of so- 
ciety, not just from traditional SPO and OVP voters. In fact, some 
members of the SPO and OVP opposed their parties' position be- 
cause they feared the social and economic consequences of mem- 
bership. This drop in support can be seen by comparing the 
two-thirds majority the two parties received in the referendum with 
the three-quarters majority the coalition received in the 1990 na- 
tional election. 

The national election of October 9, 1994, was a resounding set- 
back for the coalition. Both parties suffered significant losses in this 
election, which had an 82 percent voter turnout. The SPO remained 
the largest party in the Nationalrat. However, its share of the vote 
fell from 42.8 percent in the 1990 election to 34.9 percent, and 
its number of seats in the 183 -member body fell from eighty to 
sixty-five. The OVP fared nearly as badly. Its share of the vote 
dropped from 32.1 percent in 1990 to 27.7 percent in 1994, and 
its share of seats fell from sixty to fifty-two. The FPO continued 
its upward trend by increasing its share of the vote, going from 
16.6 percent in 1990 to 22.5 percent in 1994, and by winning forty- 
two seats, compared with thirty-three seats four years earlier. The 
largest of the environmentalist parties, The Greens, increased its 
share of the vote from 4.8 percent to 7.3 percent and the number 
of its seats from ten to thirteen. The Liberal Forum, in its first 
national election, won 6.0 percent of the vote and gained eleven 
seats. 

The election showed that the political trends that had been un- 
der way through the 1980s had continued. The SPO-OVP share 
of the vote continued to drop precipitously, amounting to only 62.6 
percent in 1994. As a result of these losses, the SPO-OVP coali- 
tion government formed in late November 1994 with Vranitzky 
as chancellor will not have the two-thirds majority needed to pass 
some legislation. 

The election was a triumph for Haider, who throughout its course 
had determined the issues on which the election was fought: the 
alleged threat of foreign immigration to the welfare of ordinary Aus- 
trians; and the incompetence and corruption of the pervasive system 



xxxi 



of governmental, party, and economic interest organizations that 
the SPO and OVP coalition had devised and that supposedly was 
suffocating the country's social and economic life. Haider saw his 
victory as merely another step toward becoming chancellor in 1998. 
To reach this goal, he has begun transforming his party into a po- 
litical movement similar to that headed by Ross Perot in the Unit- 
ed States. Whether or not Haider achieves his goal, he is likely 
to remain one of Austria's foremost politicians because of his skill 
in raising issues that have become central concerns to voters fac- 
ing the challenges of the new Europe emerging after the end of 
the Cold War. 

The end of the Cold War and the breakup not only of the War- 
saw Pact but also of some of the countries that belonged to it have 
ended the decades of relative stability in Central Europe. In addi- 
tion, in the early 1990s Yugoslavia, Austria's neighbor to the south, 
also broke into a number of separate states, some of which were 
soon at war. Large numbers of refugees have fled to Austria and 
other Western countries, seeking temporary or permanent asylum. 
As a result of these events, Austria, once securely tucked away in 
one corner of Western Europe and sheltered from the East by the 
Iron Curtain, has come to occupy a more exposed and less secure 
position in Central Europe. 

In the postwar era, Austria has pursued a neutral and active for- 
eign policy. The State Treaty of 1955 ended the country's occu- 
pation by foreign troops and restored its sovereignty. As a condition 
for winning its independence, Austria pledged itself to permanent 
neutrality and promised never to join a military alliance or to al- 
low foreign troops to be stationed on its territory. Lying between 
the two military alliances of the Cold War, Austria became an in- 
termediary between the two blocs. Vienna became the home to in- 
ternational organizations and the site of important international 
meetings. An Austrian diplomat, Kurt Waldheim, was secretary 
general of the United Nations (1971-81), and Austrian military 
forces regularly participated in that organization's multinational 
peacekeeping missions around the world. 

In the post-Cold War environment, however, Austria's active 
neutrality is seen by many as no longer relevant. Hence, policy 
makers are searching for a security policy better adapted to Aus- 
tria's newly exposed position. Entry into the EU will reduce Aus- 
tria's foreign policy independence and its traditional neutrality. 
Austria is expected to apply for observer status in the Western 
European Union (WEU — see Glossary) after it joins the EU and 
is likely to eventually become a member of this security organi- 
zation. Austria's foreign policy makers contend that there is no 



xxxn 



conflict between being a member of the WEU and maintaining 
the constitutional pledge of permanent neutrality, stating that it 
is Austria's right to interpret its neutrality. Whatever new security 
agreements are entered into later in the 1990s, however, Austria's 
policy of permanent and active neutrality, at least as it has so far 
been practiced, is probably nearing an end. 

The likely extension of EU membership early in the next century 
to East European nations with free-market economies and 
parliamentary democracy will also reduce Austria's postwar role 
as an intermediary between East and West. As a result of the new 
Europe forming after the political and economic revolutions be- 
ginning in 1989, Austria is faced with abandoning the foreign poli- 
cies that have served it so well in the postwar era. However, Austria 
will meet this new international environment not as a small poor 
nation surrounded by more powerful neighbors, as it did twice in 
the twentieth century after defeats in world wars, but as a prosperous 
and stable society and an integral part of a united Europe. 



December 5, 1994 Eric Solsten 



xxxiii 



Chapter 1. Historical Setting 




Coat of arms of the province of Styria 



GERMANIC TRIBES WERE not the first peoples to occupy the 
eastern Alpine-Danubian region, but the history and culture of these 
tribes, especially the Bavarians and Swabians, are the foundation 
of Austria's modern identity. Austria thus shares in the broader 
history and culture of the Germanic peoples of Europe. The terri- 
tories that constitute modern Austria were, for most of their history, 
constituent parts of the German nation and were linked to one 
another only insofar as they were all feudal possessions of one of 
the leading dynasties in Europe, the Habsburgs. 

Surrounded by German, Hungarian, Slavic, Italian, and Turk- 
ish nations, the German lands of the Habsburgs became the core 
of their empire, reaching across German national and cultural 
borders. This multicultural empire was held together by the Habs- 
burgs' dynastic claims and by the cultural and religious values of 
the Roman Catholic Counter-Reformation that the Habsburgs cul- 
tivated to provide a unifying identity to the region. But this cultural- 
religious identity was ultimately unable to compete with the rising 
importance of nationalism in European politics, and the nineteenth 
century saw growing ethnic conflict within the Habsburg Empire. 
The German population of the Habsburg Empire directed its 
nationalist aspirations toward the German nation, over which the 
Habsburgs had long enjoyed titular leadership. Prussia's success- 
ful bid for power in Germany in the nineteenth century — culminat- 
ing in the formation in 1871 of a German empire under Prussian 
leadership that excluded the Habsburgs' German lands — was thus 
a severe political shock to the German population of the Habsburg 
Empire. 

When the Habsburg Empire collapsed in 1918 at the end of 
World War I, its territories that were dominated by non-German 
ethnic groups established their own independent nation-states. The 
German-speaking lands of the empire sought to become part of 
the new German republic, but European fears of an enlarged Ger- 
many forced them to form an independent Austrian state. The new 
country's economic weakness and lack of national consciousness 
contributed to political instability and polarization throughout the 
1920s and 1930s and facilitated the annexation (Anschluss) of Aus- 
tria by Nazi Germany in 1938. 

As part of Germany, Austria came under Nazi totalitarian rule 
and suffered military defeat in World War II. To escape this Nazi 
German legacy, Austrians began to seek refuge in a national identity 



3 



Austria: A Country Study 



that emphasized their cultural and historical differences with Ger- 
mans even before the end of the war. Thus, the population wel- 
comed the 1945 decision of the victorious Allied powers to restore 
an independent Austria. 

The bitter experience of the Anschluss and World War II en- 
abled Austrians to overcome the extreme political polarization of 
the interwar years through a common commitment to parliamentary 
democracy and integration with the West. The close cooperation 
of the two major parties, the Socialist Party of Austria (Sozialistische 
Partei Osterreichs — SPO) and the Austrian People's Party (Os- 
terreichische Volkspartei — OVP), helped Austria frustrate Soviet 
efforts after World War II that might have seen the country's ab- 
sorption into the Soviet bloc or division into communist and non- 
communist halves. The signing of the State Treaty in 1955 ended 
Allied occupation of Austria and any immediate danger of com- 
munist dictatorship and/or partition. But the occupation era and 
the continuing Cold War shaped the country's identity and self- 
understanding as it positioned itself as a neutral country bridging 
East and West. 

This new Austrian cultural, political, and international identity 
laid the foundation for a stable democracy, a strong economy tied 
to the West, and neutrality between communist and democratic 
Europe. At the same time, however, it discouraged close exami- 
nation of the role played individually and collectively by Austri- 
ans in Nazi aggression and war crimes. Revelations about the 
wartime record of Kurt Waldheim during the presidential election 
in 1985 thus initiated a painful reassessment of Austria's Nazi past. 
Moreover, the end of the Cold War has undercut Austria's self- 
appointed mission as a bridge between East and West. A redefini- 
tion of Austrian nationalism and its international role thus seems 
likely in the 1990s. 

The Alpine-Danubian Region Before the Habsburg 
Dynasty 

The Celtic and Roman Eras 

Around 400 B.C., Celtic peoples from Western Europe settled 
in the eastern Alps. A Celtic state, Noricum, developed around 
the region's ironworks in the second century B.C. The Romans 
occupied Noricum without resistance in 9 B.C. and made the 
Danube River the effective northern frontier of their empire. 

North of the Danube, various German tribes were already ex- 
tending their territory. By the latter half of the second century A.D. , 
they were making devastating incursions into Roman territories. 



4 



Historical Setting 



Nevertheless, Roman arms and diplomacy maintained relative sta- 
bility until the late fourth century, when other Germanic tribes, 
including the Ostrogoths, Visigoths, and Vandals, were able to es- 
tablish settlements in Roman territory south of the Danube. The 
Roman province gradually became indefensible, and much of the 
Christian, Romanized population evacuated the region in 488. In 
493 the Ostrogoths invaded Italy, seized control of what remained 
of the western half of the Roman Empire, and brought the Ro- 
man era in the eastern Alps to an end. 

The Early Medieval Era 

Various Germanic and Slavic tribes vied for control of the eastern 
Alpine-Danubian region following the withdrawal and collapse of 
Roman authority. Among the Germanic tribes, Alemanni (later 
known as Swabians) and Bavarians were the most notable. The 
Alemanni had arrived during the Roman era and by 500 were per- 
manently established in most of modern-day Switzerland and the 
Austrian province of Vorarlberg. The early history of the Bavarians 
is not clear, but by the mid-500s they were established alongside 
remnants of earlier, Romanized peoples in areas north and south 
of the present-day border between Austria and Germany. Both Swa- 
bians and Bavarians were subject to another Germanic tribe, the 
Franks, but effective Frankish control did not occur until the time 
of Emperor Charlemagne in the late 700s. 

Slavic peoples, including Slovenes, Croats, Czechs, and Slovaks, 
settled in the region as subject peoples of the Avars, a nomadic 
tribe, and gradually absorbed their nomadic overlords. During the 
Carolingian era (eighth and ninth centuries), the areas of Slavic 
settlement, like those of the Swabians and Bavarians, became sub- 
ject to the Franks. 

Under Frankish patronage, Irish monks, most notably Saint 
Columban and Saint Gall, pioneered the Christian evangelization 
of the region in the seventh and eighth centuries. Their work gave 
rise to important monasteries whose agricultural activities on the 
frontiers of the Carolingian Empire helped open the region's 
primeval forests to wider settiement. Eventually integrated into the 
feudal political structure, the abbots of these monasteries vied with 
bishops and secular lords for religious and political influence well 
into the modern era. Bishoprics were established in four major 
Bavarian towns in the 730s. Salzburg, the only one of these to lie 
within modern Austria, was raised to the status of an archbishopric 
in 798 and was given jurisdiction over the other bishoprics. Salz- 
burg became the center of the Christian evangelization efforts in 



5 



Austria: A Country Study 

the Slavic territories, which were instrumental in spreading the po- 
litical reach of the Carolingian Empire. 

The Holy Roman Empire and the Duchy of Austria 

The gradual eastward extension of the Carolingian Empire was 
stopped by the arrival of the Magyars — a Finno-Ugric people who 
form the ethnic core of the Hungarian nation — in the Danubian 
region in 862. Within fifty years, the Magyars had seized the Hun- 
garian Plain, conquered Moravia and the eastern Danubian 
marches of the Carolingian Empire, and raided deep into Frankish 
territory. A reorganization of the German portion of the Carolin- 
gian Empire in the first half of the tenth century enabled the Ger- 
mans to rally their forces and defeat a Magyar invasion force at 
the Battle of Lechfeld in 955. This new and essentially German 
empire became known as the Holy Roman Empire and eventual- 
ly regained much of the territory lost to the Magyars. Neverthe- 
less, the Magyars' continuing military strength and their conversion 
to Christianity during the reign of King Stephen (r. 997-1038) en- 
abled Hungary to become a legitimate member of Christian Eu- 
rope and check German expansion to the east. 

Under the Holy Roman Empire, the territories that constitute 
modern Austria were a complex feudal patchwork under the sway 
of numerous secular and ecclesiastical lords. Most of the territo- 
ries originally fell within the boundaries of the Duchy of Bavaria. 
Over the years, various territories were effectively detached from 
Bavaria, either becoming part of the newly established duchies of 
Carinthia (976) and Styria (1 180) or, like Salzburg and Tirol, falling 
under the jurisdiction of powerful bishops. In the final years of the 
reign of Emperor Otto the Great (r. 936-73), a small margravate 
roughly corresponding to the present-day province of Lower Aus- 
tria was formed within Bavaria. This margravate became known 
as Ostarrichi (literally, Eastern Realm), from which the modern 
name Austria (Osterreich) ultimately derives. The Margravate of 
Austria was detached from Bavaria and became a separate duchy 
in 1156. 

Between 976 and 1246, the Duchy of Austria was one of exten- 
sive feudal possessions of the Babenberg family. Through their ties 
of blood and marriage to two successive German imperial dynasties, 
the Babenbergs gradually acquired lands roughly corresponding 
to the modern provinces of Upper Austria, Lower Austria, Styr- 
ia, and Carinthia. When the Babenberg line died out in 1246, their 
lands passed to the ambitious king of Bohemia, Otakar II. As king 
of Bohemia, Otakar was one of the small circle of "elector-princes" 
who were entitled to participate in the election of the Holy Roman 



6 



Emperor Maximilian I, 
Holy Roman Emperor 
from 1493 to 1519, 
greatly expanded 
Habsburg territory. 
Courtesy Austrian 
National Tourist 
Office, New York 



Emperor. When Otakar failed to be elected emperor in 1273, he 
contested the election of the new emperor, Rudolf von Habsburg. 
The Bohemian king met his defeat and death in battle in 1278, 
and the former Babenberg lands passed to the Habsburgs, who 
added them to their already extensive lands in present-day Swit- 
zerland, southwestern Germany, and eastern France. 

Rise of the Habsburg Empire 

The Habsburg Dynasty in the Late Medieval Era 

Although the Duchy of Austria was just one of the duchies and 
lands that the Habsburgs eventually acquired in the eastern Alpine- 
Danubian region, the Habsburgs became known as the House of 
Austria after the Swiss peasantry ousted them from their original 
family seat in Habichtsburg in the Swiss canton of Aargau in 1386. 
The name Austria subsequently became an informal way to refer 
to all the lands possessed by the House of Austria, even though 
it also remained the proper, formal name of a specific region. Thus, 
through the legacy of common rule by the House of Austria, the 
lands that constitute the modern state of Austria indirectly adopted 
the name of one region of the country as the formal national name 
in the early twentieth century. 

Because the elector-princes of the Holy Roman Empire gener- 
ally preferred a weak, dependent emperor, the powerful Habsburg 



7 



Austria: A Country Study 

Dynasty only occasionally held the imperial title in the 150 years 
after Rudolf's death in 1291. After the election of Frederick III 
in 1452 (r. 1452-93), however, the dynasty came to enjoy such 
a dominant position among the German nobility that only one non- 
Habsburg was elected emperor in the remaining 354-year history 
of the Holy Roman Empire. 

The Habsburgs' near monopoly of the imperial title, however, 
did not make the Habsburg Empire and the Holy Roman Empire 
synonymous. The Habsburg Empire was a supernational collec- 
tion of territories united only through the accident of common rule 
by the Habsburgs, and many of the territories were not part of 
the Holy Roman Empire. In contrast, the Holy Roman Empire 
was a defined political and territorial entity that became identified 
with the German nation as the nation-state assumed greater im- 
portance in European politics. 

Although the succession of Holy Roman Emperors from the 
Habsburg line gave the House of Austria great prestige in Ger- 
many and Europe, the family's real power base was the lands in 
its possession, that is, the Habsburg Empire. This was because the 
Holy Roman Empire was a loosely organized feudal state in which 
the power of the emperor was counterbalanced by the rights and 
privileges of the empire's other princes, lords, and institutions, both 
secular and ecclesiastical. 

Habsburg power was significantly enhanced in 1453, when Em- 
peror Frederick III confirmed a set of rights and privileges, dubi- 
ously claimed by the Habsburgs, that paralleled those of the 
elector-princes, in whose ranks the family did not yet sit. In addi- 
tion, the lands the Habsburgs possessed in 1453 were made inherita- 
ble through both the male and the female line. Because feudal 
holdings usually reverted to the emperor to dispose of as he wished 
when the holder of the fief died, the right of inheritable succession 
measurably strengthened the Habsburgs. The lands they held in 
1453 became known collectively as the Hereditary Lands, and — 
with the exception of territories possessed by the archbishops of 
Salzburg and Brixen — encompassed most of modern Austria and 
portions of Germany, France, Italy, Croatia, and Slovenia. 

Territorial Expansion, Division, and Consolidation 

The Habsburgs also increased their influence and power through 
strategic alliances ratified by marriages. Owing to premature deaths 
and/or childless marriages within the Burgundian and Spanish dy- 
nasties into which his grandfather, Maximilian I (r. 1493-1519), 
and his father had married, Emperor Charles V (r. 1519-56) in- 
herited not only the Hereditary Lands but also the Franche-Comte 



8 



Historical Setting 



and the Netherlands (both of which were French fiefs) and Spain 
and its empire in the Americas. 

Challenged on his western borders by France and on his eastern 
borders by the Turkish Ottoman Empire, Charles V divided his 
realm geographically in 1522 to achieve more effective rule. Re- 
taining the western half under his direct control, he entrusted the 
eastern half, the Hereditary Lands, to his brother, Ferdinand (r. 
1522-64). Although Ferdinand did not become Holy Roman Em- 
peror until 1556 when Charles V abdicated, this territorial divi- 
sion effectively created two branches of the Habsburg Dynasty: the 
Spanish Habsburgs, descended through Charles V, and the Aus- 
trian Habsburgs, descended through Ferdinand (see fig. 2). 

In addition to the lands he received from his brother, Ferdinand 
also increased his territorial reach by marrying into the Jagiellon 
family, the royal family of Hungary and Bohemia. When his 
brother-in-law, King Louis, died fighting the Turks at the Battle 
of Mohacs in 1526, Ferdinand claimed the right of succession. 
Although the diets representing the nobility of Bohemia (and its 
dependencies of Moravia and Silesia) did not acknowledge Ferdi- 
nand's hereditary rights, they formally elected him king of Bohemia. 
As king of Bohemia, he also became an elector-prince of the Holy 
Roman Empire. In Hungary and in the subordinate Kingdom of 
Croatia-Slavonia-Dalmatia, however, Ferdinand faced the rival 
claim of a Hungarian nobleman and the reality of the Turkish con- 
quest of the country. He was able to assert authority only over the 
northern and western edges of the country, which became known 
as Royal Hungary. His Hungarian rival became a vassal of the 
Turks, ruling over Transylvania in eastern Hungary. The rest of 
Hungary became part of the Ottoman Empire in 1603. 

Although Ferdinand undertook various administrative reforms 
in order to centralize authority and increase his power, no meaning- 
ful integration of the Hereditary Lands and the two newly acquired 
kingdoms occurred. In contrast to the authority of kings of Western 
Europe, where feudal structures were already in decline, Ferdi- 
nand's authority continued to rest on the consent of the nobles as 
expressed in the local diets, which successfully resisted adminis- 
trative centralization. 

The Protestant Reformation in the Habsburg Lands 

From the beginning of the Protestant Reformation in the 1520s, 
Protestant doctrines were welcomed by the people living in the areas 
under Habsburg domination. By the middle of the sixteenth cen- 
tury, most inhabitants were Protestant. Lutherans predominated 
in German- speaking areas, except in Tirol, where the Anabaptists 



9 




Figure 2. Europe in the Sixteenth Century 



were influential. Nevertheless, the Roman Catholic Church retained 
the support of the Habsburg Dynasty and was able to maintain 
a strong presence throughout the area. 

Religious violence and serious persecution were rare after the 
1520s, and an uneasy coexistence and external tolerance prevailed 
for most of the sixteenth century. Ferdinand pressed Rome for con- 
cessions that would bridge the positions of moderate reformers and 
Catholics, but at the Council of Trent (1545-63), the Catholic 
Church chose instead a vigorous restatement of Catholic doctrine 
combined with internal reforms. The council thus hardened lines 
of division between Catholicism and Protestantism and laid the 
foundation for the Counter-Reformation, which the Habsburgs 
would pursue aggressively in the 1600s. 

The Turkish Threat 

After the Turkish siege of Vienna in 1529, Ferdinand recognized 



10 



Historical Setting 



that defense of the Habsburg lands required that Hungary form 
a bulwark against the Turks. Although Turkey's ultimate objec- 
tive was the conquest of Europe, Western Europe did not see the 
Turks as a threat and was unwilling to aid Ferdinand in the defense 
of the continent's eastern borders. He thus signed a peace agree- 
ment with the Turks in 1562 that formalized the stalemated status 
quo in Hungary. 

The Counter-Reformation and the Thirty Years' War 

Division and Rebellion 

Ferdinand I died in 1564, and Habsburg territories in Central 
Europe were divided among his three sons, with the eldest, Max- 
imilian III.(r. 1564-76), becoming Holy Roman Emperor. Al- 
though Maximilian's sympathetic policies toward the Protestants 
contrasted with his brothers' efforts to reestablish Catholicism as 
the sole religion in their lands, military policy, not religious doc- 
trine, was to divide the dynasty in the final years of the sixteenth 
century and open the door to the religious wars of the seventeenth 
century. 

Maximilian's son, Rudolf II (r. 1576-1612), succeeded his father 
as both king of Hungary and Holy Roman Emperor. After the 
Turks reopened the war in Hungary in 1593, Rudolf was blamed 
for the rebellion among Protestant nobles in Royal Hungary caused 
by his brutal conduct of the war. Backed by junior members of 
the dynasty, Rudolfs younger brother, Matthias (r. 1612-19), con- 
fiscated Rudolfs lands, restored order, and, after Rudolfs death, 
became Holy Roman Emperor. But the religious and political con- 
cessions that the two brothers had made to the nobility to win their 
support in this dynastic feud created new dangers for the Habsburgs. 

The childless Matthias chose his cousin Ferdinand as his suc- 
cessor. To facilitate Ferdinand's eventual election as Holy Roman 
Emperor, Matthias secured his election as king of Bohemia in 1617. 
Before accepting Ferdinand as king, however, the Protestant no- 
bility of Bohemia had required this strong proponent of the Catholic 
Counter-Reformation to confirm the religious charter granted them 
by Rudolf II. A dispute over the charter in 1618 triggered a rebel- 
lion by the Protestant nobles. Hopes for an arbitrated settlement 
were dashed when Matthias died in March 1619, and other areas 
under Habsburg control rebelled against Habsburg rule. 

The Thirty Years' War, 1618-48 

The anti-Habsburg rebellions reflected the rising tensions be- 
tween Catholics and Protestants in the early 1600s. Proponents of 



11 



Austria: A Country Study 

the Counter-Reformation, often operating under Habsburg pro- 
tection, were reaping the fruits of a generation of work: monastic 
life was reviving, Catholic intellectual life was regaining confidence, 
and prominent figures were returning to the Catholic Church. As 
a result, Protestants were increasingly on the defensive. The Ger- 
man princes split into two military camps based on religious affili- 
ation: the Evangelical Union and the Catholic League. 

In August 1619, a Bohemian diet elected as king the Protestant 
elector-prince of the Palatinate, Frederick V, and the conclave of 
elector-princes elected Ferdinand II (r. 1619-37) Holy Roman Em- 
peror. On November 8, 1620, a force combining troops from the 
Catholic League and the imperial army decisively defeated Freder- 
ick V's largely mercenary force at the Batde of White Mountain. 
Throughout the 1620s, the combined imperial and Catholic forces 
maintained the offensive in Germany, enabling Ferdinand to 
establish his authority in the Hereditary Lands, Bohemia, and 
Hungary. 

Equating Protestantism with disloyalty, Ferdinand imposed re- 
ligious restrictions throughout the Hereditary Lands. In 1627 he 
implemented a long-planned decree to make Bohemia a one- 
confession state: Protestants were given six months to convert or 
leave the country. In the face of a strong Hungarian nationalist 
movement headed by the Calvinist prince of Transylvania, how- 
ever, Ferdinand could maintain his hold on Royal Hungary only 
by confirming guarantees of religious freedom. 

Foreign intervention by Denmark, Sweden, and France kept Fer- 
dinand from bringing the war to a conclusion through military 
power and also frustrated his efforts in the mid- 1630s to reach a 
compromise with the Protestant German princes. The subsequent 
military campaigns of the Thirty Years' War, however, only mar- 
ginally affected those portions of the Habsburg territories that are 
part of modern Austria. 

The Peace of Westphalia 

The Thirty Years' War was finally ended in 1648 by the Peace 
of Westphalia. The treaty guaranteed the religious and political 
constitution of the Holy Roman Empire, giving the German princes 
the sovereign right to settle the religious question in their respec- 
tive territories. France also achieved its main war aim because the 
costly war and the concessions to the princes effectively stopped 
the Habsburgs from transforming the Holy Roman Empire into 
an absolutist state under their direction. Nonetheless, in their own 
lands, the Habsburgs enjoyed greater political and religious con- 
trol than before the war: they had gained loyal new followers from 



12 



Historical Setting 

among the nobles by redistributing estates confiscated from rebels, 
and they were free to enforce religious conformity, which they did 
based on the model applied earlier in Bohemia. 

The Baroque Era 

Political and Religious Consolidation under Leopold 

Reconstruction of the social, political, and economic infrastruc- 
ture destroyed by the Thirty Years' War began during the reign 
of Ferdinand III (r. 1637-57) and continued through the reign of 
his son, Leopold I (r. 1658-1705). Central to the restoration of 
the Habsburgs' social and political base was the reestablishment 
of the Roman Catholic Church. But the Habsburgs did not seek 
to make the church an independent force within society. They found 
no contradiction between personal piety and use of religion as a 
political tool and defended and advanced their sovereign rights over 
and against the institutional church. 

The Habsburg effort to establish religious conformity was based 
on the model already implemented in Bohemia. Closure of Prot- 
estant churches, expulsions, and Catholic appointments to vacated 
positions eliminated centers of Protestant power. Reform commis- 
sions made up of clergy and representatives of local diets appointed 
missionaries to Protestant areas. After a period of instruction, the 
populace was given a choice between conversion and emigration — 
an estimated 40,000 people emigrated between 1647 and 1652. 

The reestablishment of Catholic intellectual life and religious 
orders and monasteries was a key component of Habsburg Counter- 
Reformation policies. The Jesuits led this effort, and their influence 
was broadly disseminated throughout Central European society, 
owing to their excellent schools, near monopoly over higher edu- 
cation, and emphasis on lay organizations, which provided a chan- 
nel for popular devotional piety. Benedictine, Cistercian, and 
Augustinian monastic foundations were also revitalized through 
the careful management of their estates, and their schools rivaled 
those of the Jesuits. 

Through the court's patronage of the arts and religious orders 
and through public celebrations, both secular and religious, the 
dynasty transmitted a worldview based on the values of the Counter- 
Reformation. These values, rather than common governmental in- 
stitutions and laws, gave the Heriditary Lands a sense of unity and 
identity that compensated for the continued weakness of adminis- 
trative bodies at the center of Habsburg rule. 



13 



Austria: A Country Study 

The Turkish Wars and the Siege of Vienna 

In 1663 rivalries between the Ottomans and the Habsburgs in 
Transylvania triggered renewed fighting between the Ottoman Em- 
pire and the Habsburg Empire. The Turkish threat, which included 
a prolonged but unsuccessful siege of Vienna in 1683, prompted 
Poland, Venice, and Russia to join the Habsburg Empire in repel- 
ling the Turks. In 1686 Habsburg forces moved into central Hun- 
gary and captured Buda. By 1687 the Ottoman Empire had been 
eliminated as a power in central Hungary. In the late 1690s, com- 
mand of the imperial forces was entrusted to Prince Eugene of Sa- 
voy. Under his leadership, Habsburg forces won control of all but 
a small portion of Hungary by 1699. 

The War of the Spanish Succession 

In 1700 the death of Charles II of Spain ended the Spanish Habs- 
burg line. Spain's steady decline throughout the seventeenth century 
had already led to minor armed conflicts aimed at a realignment 
of power among European countries, and these rivalries blossomed 
into the War of the Spanish Succession (1701-14). Both Leopold 
I and King Louis XIV of France, Charles's two nearest relatives, 
hoped to establish a junior branch of his own dynasty in Spain. 
But neither was willing to rule out the possibility that a single heir 
might someday inherit the lands of both the principal line and its 
Spanish offshoot. The strong central government and political in- 
stitutions of France made the possible union of Spain and France 
a far greater threat to other European countries than the possible 
union of Spain and the Habsburg lands in Central Europe. Thus, 
when the dying Spanish king named as his heir Louis's son, Philip, 
England and a number of other European countries rallied to the 
Habsburg cause. 

Despite early victories by the Austro-English alliance, the allies 
were unable to install the Austrian Archduke Charles on the Spanish 
throne. As the war dragged on, the alliance began to unravel, es- 
pecially when, after the death of Leopold's elder son, Charles be- 
came Holy Roman Emperor in 1711. The actual unification of the 
Habsburg lines in Charles VI (r. 1711-40) posed a greater threat 
to other European powers than did the possible union of war- 
weakened France and Spain. Austria's allies made peace with 
France in 1713 and signed the Treaty of Utrecht. Because his former 
allies negotiated a treaty to protect their own interests, the settle- 
ment Charles received when he finally abandoned the war in 1714 
was meager: the Spanish Netherlands (present-day Belgium) and 
various Italian territories. 



14 



Historical Setting 



The Pragmatic Sanction and the War of the Austrian Succession, 
1740-48 

Although the Habsburg Empire continued to expand in the east 
at Turkish expense, Charles VI recognized that defense of Aus- 
tria's position in Europe required greater economic and political 
centralization to foster the development of a stronger economic base. 
Because he lacked a male heir, however, the continued unity of 
the Habsburg Empire was jeopardized. In 1713 Charles promul- 
gated the Pragmatic Sanction to establish the legal basis for trans- 
mission of the Habsburg lands to his daughter Maria Theresa (r. 
1740-80). The price extracted by local diets and rival European 
powers for approval of the Pragmatic Sanction, however, was aban- 
donment of many centralizing reforms. 

Nonetheless, Charles's concessions did not prevent the War of 
the Austrian Succession (1740-48) from breaking out on his death 
in 1740. Prussia occupied Bohemia's Silesian duchies that same 
year. Late in 1741, the elector-prince of Bavaria, Charles Albert, 
occupied Prague, the capital of Bohemia, with the aid of Saxon 
and French troops and was crowned king of Bohemia. This paved 
the way for his election as Holy Roman Emperor in 1742, thus 
breaking the Habsburgs' three-hundred-year hold on the imperial 
crown. 

The Austrians, however, retook Prague, and Maria Theresa was 
crowned queen of Bohemia in the spring of 1743. Aided by a Brit- 
ish diplomatic campaign, Austria also made important military 
gains in Central Europe. Thus, when Charles Albert unexpectedly 
died in January 1745, his son made peace with Austria and agreed 
to support the Habsburg candidate for emperor. This enabled Maria 
Theresa's husband, Franz (r. 1745-65), to be elected Holy Ro- 
man emperor in October 1745. In the west, the war with France 
and Spain gradually settled into a military stalemate, and negoti- 
ations finally led to the Peace of Aix-la-Chapelle in 1748. 

Although Maria Theresa emerged with most of her empire 
intact — owing largely to the early support she received from Hun- 
garian nobles — Austria was obliged to permanently cede Silesia, 
its most economically advanced territory, to Prussia. Recognizing 
that the costiy war with France had done more to promote British 
colonial interests in North America than its own interests in Cen- 
tral Europe, Austria abandoned its partnership with Britain in favor 
of closer ties with France. This reversal of alliances was sealed by 
the marriage of Maria Theresa's youngest daughter, Marie An- 
toinette, to the future Louis XVI of France. 



15 



Austria: A Country Study 

The Reforms of Maria Theresa and Joseph II 
Baroque Absolutism and Enlightened Despotism 

Although her husband was emperor, Maria Theresa ruled the 
Habsburg lands. However, when her son Joseph became Holy Ro- 
man Emperor after the death of her husband in 1765, she made 
her son coregent. Following Maria Theresa's death in 1780, Joseph 
II reigned in his own right until his death in 1790. The Counter- 
Reformation's political and religious goals had largely been accom- 
plished by the time Maria Theresa came to the throne, but main- 
taining Austria's great-power status urgentiy required broad internal 
reform and restructuring to strengthen the central authority of the 
monarchy and curtail the power of the nobility. 

Maria Theresa began administrative and economic reforms in 
1749, drawing on mercantilist theory and examples provided by 
Prussian and French reforms. In addition, she undertook reforms 
in the social, legal, and religious spheres. During the coregency 
and after Maria Theresa's death, Joseph continued the reforms 
along the lines pursued by his mother. But mother and son had 
sharply different motivations. Maria Theresa was a pious Catholic 
empress working within the structure of a paternalistic, baroque 
absolutism and was unsympathetic to the Enlightenment. Joseph, 
in contrast, gave the reforms an ideological edge reflecting the 
utilitarian theories of the Enlightenment. Because his reforms were 
more ideologically driven and thus less flexible and pragmatic, they 
frequently were also less successful and disrupted the stability of 
the Habsburg Empire. 

Although the statist religious policy that evolved in this era be- 
came known as Josephism, Joseph's policy was largely an exten- 
sion of his mother's, whose piety did not exempt the church from 
reforms designed to strengthen state authority and power. Joseph's 
utilitarianism, however, contributed to two important divergences 
from Maria Theresa's policy: greater religious toleration and sup- 
pression of religious institutions and customs deemed contrary to 
utilitarian principles. The Edict of Tolerance, issued in 1781, grant- 
ed Protestants almost equal status with Catholics; other decrees 
lifted restrictions on Jews and opened up communities, trades, and 
educational opportunities previously barred to them. The utilitar- 
ian principles behind religious toleration, however, also inspired 
Joseph to dissolve Catholic monasteries that were dedicated solely 
to contemplative religious life and to suppress various traditional 
Jewish customs he viewed as detrimental to society and a hinder- 
ance to the Germanization of the Jewish population. 



16 



Maria Theresa (r. 1740-80) 
reformed and united 
Habsburg holdings. 

Courtesy Embassy of Austria, 
Washington 



The reforms created an administrative, fiscal, and judicial 
bureaucracy directly responsible to the monarch. As the seat of the 
new centralized institutions, Vienna grew from merely being the 
sovereign's place of residence to a true political and administra- 
tive capital. Hungary, however, was not included in these centraliz- 
ing administrative reforms. In appreciation for the support Austria 
had received from the Hungarian nobles during the War of the 
Austrian Succession, Maria Theresa never extended her reforms 
to that kingdom. 

The Strategic Impact of the Reform Era 

Although the reforms improved Austrian military preparedness, 
they fell short of their original goal of enabling Austria to defend 
its interests in Europe. Hopes of regaining Silesia and partition- 
ing Prussia were abandoned after only limited military success in 
the Austro-Prussian Seven Years' War (1756-63). Efforts to check 
Russian expansion yielded mixed results. Unable to prevent Rus- 
sian and Prussian ambitions against Poland, Austria reluctantly 
joined them in the First Partition of Poland in 1772 and gained 
the province of Galicia. Five years later, Austria intervened be- 
tween Russia and Turkey to prevent Russian gains at Turkish ex- 
pense and in the process acquired Bukovina, a territory adjacent 
to Galicia and Transylvania. Because the new territories were eco- 
nomically backward, their acquisition served mainly to shift the 



17 



Austria: A Country Study 

ethnic balance of the Habsburg Empire through the addition of 
a large Slavic population (Poles and Ruthenians), a sizable Jewish 
minority (which accounted for 60 percent of the empire's total Jew- 
ish population), and a lesser number of Romanians. 

The ideological rigidity with which Joseph II carried out his re- 
forms also weakened the Habsburg Dynasty by provoking social 
unrest and, in Hungary and Belgium, rebellion. When Joseph died 
in 1790, his brother, Leopold II (r. 1790-92), had to reverse many 
of the reforms and offer new concessions to restore order. To get 
Prussian support for the military action that reestablished Habs- 
burg authority in Belgium in 1790, Leopold foreswore further Aus- 
trian territorial gains at Turkish expense. He also confirmed 
Hungary's right not to be absorbed into a centralized empire, but 
to be ruled by him as king of Hungary according to its own ad- 
ministration and laws. In exchange, the Hungarian nobility ended 
their rebellion. 

The Habsburg Empire and the French Revolution 

The Napoleonic Wars 

What began as a retrenchment in Austria's reform program 
ground to a complete halt when the international crisis caused by 
the French Revolution engulfed Europe in a generation of war. 
Meeting in Potsdam in 1791, Leopold II and the king of Prussia 
jointly declared that the revolutionary situation in France was a 
common concern of all sovereigns. Although the declaration did 
not become the framework for European military intervention in 
France as its authors had hoped, it set Austria and the French Revo- 
lution on an ideological collision course. In April 1792, revolution- 
ary France declared war on Austria. 

The first war lasted for five years until Austria, abandoned by 
its allies, was forced to make peace on unfavorable terms. Austria 
renewed the war against France in 1799 and again in 1805 but was 
swiftly defeated both times. In the otherwise unfavorable settle- 
ment after the defeat in 1805, however, Austria did receive Salz- 
burg, a territory formerly ruled by an archbishop, in compensation 
for the loss of various Italian and German possessions. 

Because French domination of Germany raised the possibility 
that Napoleon Bonaparte or one of his subordinates could be elected 
Holy Roman Emperor, Leopold's son, Franz II (r. 1792-1835), 
took two steps to protect Habsburg interests. First, to guarantee 
his family's continued imperial status, he adopted a new, heredi- 
tary title, Emperor of Austria, in 1804, thus becoming Franz I 
of Austria. Second, to preclude completely the possibility of 



18 



Historical Setting 



Napoleon's election, in 1806 he renounced the title of Holy Roman 
Emperor and dissolved the Holy Roman Empire. 

In the final years of the decade, the German Habsburg area was 
swept with anti-French nationalist fervor. Erroneously believing 
that similar nationalist fervor throughout Germany would produce 
a victory, Austria declared war on France in April 1809. In the 
Tirol, then under Bavarian rule, the peasants, led by Andreas 
Hofer, rebelled and scored surprising victories before being sub- 
dued by Napoleon's forces. Elsewhere in Germany, however, na- 
tionalist feeling had little effect. Austria's defeat was swift, and 
significant territorial losses followed. 

In the wake of this defeat, Franz appointed a new foreign 
minister, Clemens von Metternich, who sought reconciliation with 
France. He accomplished this by arranging a marriage between 
Franz's daughter, Marie Louise, and Napoleon, who was eager 
for the prestige of marriage into one of the principal dynasties of 
Europe and the creation of an heir. The marriage took place in 
the spring of 1810 but yielded litde immediate return for Austria. 

In 1813 Napoleon's position began to weaken. His invasion of 
Russia had failed, and Britain was scoring victories in the Iberian 
Peninsula. Both sides of the conflict began bidding for Austria's 
support. In August of that year, Austria broke its alliance with 
France and declared war. Despite generous subsidies from Britain, 
the final campaigns against Napoleon in 1814 and 1815 strained 
Austria's financial and human resources. Thus, Austria emerged 
as a victor from the war but in a severely weakened state. 

The Congress of Vienna 

From September 1814 to June 1815, representatives of the Eu- 
ropean powers met in Vienna. Guided by Metternich, the Con- 
gress of Vienna redrew the map of Europe and laid the foundation 
for a long period of European peace. The Habsburg Empire 
emerged with boundaries both more extensive and compact than 
it had had for several centuries. Belgium and the Habsburg lands 
in southwest Germany were los't, but Austria regained all other 
possessions that it had held in 1 792 and virtually all of those it had 
obtained during the long years of war, including Salzburg (see fig. 
3). The Holy Roman Empire was not resurrected but was replaced 
with a German Confederation composed of thirty-five sovereign 
princes and four free cities. Austria held the permanent presiden- 
cy of the confederation and probably had more real influence in 
Germany than it had had under the Holy Roman Empire. Austria 
also enjoyed the dominant position on the Italian peninsula, where 
it possessed the northern territories of Lombardy and Venetia. 



19 



Austria: A Country Study 




Figure 3. Austrian Empire, 1815 

The wartime allies — Austria, Britain, Russia, and Prussia — 
concluded the Congress of Vienna by signing the Quadruple Alli- 
ance, which pledged them to uphold the peace settlement. In a 
secondary document, the European monarchs agreed to conduct 
their policies in accordance with the Christian principles of charity, 
peace, and love. This "Holy Alliance," proposed by the Russian 
tsar, Alexander I, was of little practical import, but it gave its name 
to the cooperative efforts of Austria, Russia, and Prussia to main- 
tain conservative governments in Europe. 

Although Austria emerged from the Congress of Vienna as one 
of the great powers in Europe, throughout the nineteenth century 
its status and territorial integrity depended on the support of at 
least one of the other great powers. As long as the allies were will- 
ing to cooperate in the "Congress System" to maintain the peace, 
order, and stability of Europe, Austrian interests were protected. 
But the other great powers, which were better able to defend their 



20 



Historical Setting 



interests by force, did not always share Austria's devotion to Met- 
ternich's creation. 

Austria in the Age of Metternich 
International Developments, 1815-48 

Clemens von Metternich was initially successful in maintaining 
a European consensus favorable to Austrian interests. He used the 
example of liberal revolutions in Spain and Naples and revolution- 
ary activity in Germany to demonstrate the universal menace posed 
by liberalism and thus won Austria the support of Prussia and Rus- 
sia. Britain also supported Austria because the two countries had 
common interests favoring a strong Austrian presence in Germany, 
limited French influence in Italy, and the maintenance of the Ot- 
toman Empire to prevent Russian advances in the Balkans. 

The support from the other great powers dissipated, however, 
in the mid- and late 1820s. Russia became more assertive in the 
Balkans, and British policy increasingly reflected that nation's liberal 
popular opinion. But Metternich was able to regain Russian and 
Prussian support in the early 1830s, following another round of 
liberal uprisings in Europe. Even Britain returned to close cooper- 
ation with the other powers to block French interests in Egypt. 
Nevertheless, Metternich failed to respond effectively to Prussia's 
formation of a German customs union in 1834. The customs 
union excluded Austria and promoted the economic integration 
of the other German states, thus facilitating German political unifi- 
cation under Prussian leadership later in the century. 

Domestic Policies 

Despite Metternich 's high profile, it was the emperor's conser- 
vative outlook and hostility toward the values and ideas of the 
French Revolution that set the parameters for Austrian policy. This 
was especially true of domestic policy, which Franz I retained un- 
der his direct personal control until his death in 1835. The com- 
position of the state council that Franz selected to rule in the name 
of his mentally incompetent son Ferdinand I ensured the continu- 
ance of his policies until revolution shook the foundations of Habs- 
burg rule in 1848. 

Franz's aim was to provide his subjects with good laws and 
material well-being. To accomplish the first, he issued a new penal 
code in 1803 and a new civil code in 1811. He expected that the 
second — material well-being — would evolve naturally with the 
reestablishment of peace, and he considered additional measures un- 
necessary. Political and cultural life was kept under careful scrutiny, 



21 



Austria: A Country Study 

however, to prevent the spread of nationalism and liberalism. These 
two movements were a common threat to Franz's conservative re- 
gime because his political opponents looked to the establishment 
of a unified German nation-state incorporating Austria as a 
means for realizing the liberal reforms impossible in the frame- 
work of the Habsburg state. 

Political stagnation, however, did not prevent broader socioeco- 
nomic changes in the empire. By 1843 the population had risen 
to 37.5 million, an increase of 40 percent from 1792. The urban 
population was rising quickly, and Vienna counted nearly 400,000 
inhabitants. Economically, a degree of stability was reached, and 
the massive wartime deficits gave way to almost balanced bud- 
gets. This was made possible by cutting state expenditures to a level 
near actual revenues, and not by instituting fiscal reforms to in- 
crease tax revenues. Austria's ability to protect its interests abroad 
or carry out domestic programs thus continued to be severely re- 
strained by lack of revenue. 

The Revolution of 1848 and Neoabsolutism 
Revolutionary Rise and Fall 

In 1848 liberal and nationalist ideologies sparked revolutions across 
Europe. In late February, the proclamation of the revolutionary 
Second Republic in France shook conservative Austria. Popular ex- 
pectations of war caused a financial panic in the Habsburg Empire 
that worked to the advantage of the revolutionaries. By early March, 
events throughout the empire were accelerating faster than the 
government could control them. As a symbol of conservative govern- 
ment, Metternich was an early casualty of the revolution. His resig- 
nation and flight in mid-March only led to greater demands. By 
mid- April the court had sanctioned sweeping liberal reforms passed 
by the Hungarian diet. In May the government was forced to an- 
nounce plans for a popularly elected constituent assembly for the 
Habsburg lands. This assembly, the first parliament in Austrian his- 
tory, opened in July 1848. 

As part of the German Confederation, the German- speaking 
Habsburg lands were also caught up in the revolutionary events in 
Germany. German nationalists and liberals convened an assem- 
bly in Frankfurt in May 1848 that suspended the diet of the German 
Confederation and took tentative steps toward German unification. 
However, the close association of nationalism and liberalism in 
Germany belied the growing conflict between these two ideolo- 
gies. Although ethnic Germans from Bohemia were participating 
in the Frankfurt assembly, Czech nationalists and liberals rejected 



22 



Clemens von Metternich 
(1773-1859) restored 
Habsburg power after 
the defeat of Napoleon. 
Courtesy Embassy of 
Austria, Washington 




Bohemian participation in the German nation being born in Frank- 
furt. They envisioned a reconstituted Habsburg Empire in which 
the Slavic nations of central and southern Europe would assume 
equality with the German and Hungarian components of the em- 
pire and avoid absorption by either Germany or Russia. The 
government gave concessions that appeared to endorse this plan, 
and the Czechs convened an Austro-Slavic congress in Prague in 
June as a counterpart to the Frankfurt assembly. 

As conservative political authority gave way before the revolu- 
tionary forces, two bold military commanders began to reassert 
control over the situation, often ignoring or contravening timid 
orders from the court. General Alfred Windischgratz routed the 
revolutionaries from Prague and Vienna and reestablished order 
by military force. South of the Alps, General Joseph Radetzky 
reestablished Austrian control of Lombardy-Venetia by August. 

Although only Hungary remained in the hands of the revolu- 
tionaries, the Austrian government began to reorganize in the fall 
of 1848. A team of ministers associated with constitutionalism was 
presented to the constituent assembly in November. The minister- 
president not only committed the government to popular liberties 
and constitutional institutions but also to the unity of the empire. 
To cap the reorganization, the mentally incompetent Ferdinand 
formally abdicated on December 2, 1848, and his eighteen-year- 



23 



Austria: A Country Study 



old nephew was crowned Emperor Franz Joseph I (r. 1848-1916). 
The young emperor faced three pressing tasks: establishing effec- 
tive political authority in the empire, crushing the rebellion in Hun- 
gary, and reasserting Austrian leadership in Germany. 

To accomplish the first, the government promulgated a secretly 
prepared constitution in March 1849. thus undercutting the con- 
stituent assembly. This constitution contained guarantees of in- 
dividual liberties and equality under the law. but its greatest 
significance lay in provisions that established a centralized govern- 
ment based on unitary political, legal, and economic institutions 
for the entire empire. 

The new constitution exacerbated the revolutionary situation in 
Hungary. The Hungarian diet deposed the Habsburg Dynasty and 
declared Hungarian independence. Although Austria could have 
eventually restored order on its own. the need to deal simultane- 
ously with events in Germany prompted Emperor Franz Joseph 
to ask for and get Russian military assistance, thus accomplishing 
his second objective. The rebellion was effectively, if brutally, ended 
by September 1849. 

Austria's decision to organize itself as a unitary state also set 
the terms for dealing with the German nationalists and liberals sit- 
ting in Frankfurt: Austria would enter a unified Germany with all 
of its territories, not merely the German and Bohemian portions. 
This contradicted an earlier decision of the assembly, so the as- 
sembly turned from the grossdeutsch (large German) model of a united 
Germany that included Austria to the kleindeutsch (small German) 
model that excluded Austria. The assembly offered a hereditary 
crown of a united Germany to the Prussian king. The conditions 
under which the offer was made, however, caused the Prussian king 
to decline in early April 1849. Combined with the withdrawal of 
the Austrian representatives, his rejection effectively ended the 
Frankfurt assembly. The German Confederation was restored, and 
Franz Joseph's tasks were completed. However. Austria and Prussia 
continued to jockey for influence and leadership in Germany. 

The Failure of Neoabsolutism 

Initially, the new Austrian government apparently intended to 
implement the constitutional political structures promised in March 
1849. But on December 31. 1851. Franz Joseph formally revoked 
the constitution, leaving in place only those provisions that estab- 
lished the equality of citizens before the law and the emancipation 
of the peasants. Popular representation was eliminated from all 
government institutions. In order to solidify a political base sup- 
porting neoabsolutist rule, the government also eliminated the 



24 



Historical Setting 



Josephist religious regulations that had been the source of continuing 
conflict with the church. In 1855 the government signed a concor- 
dat with the Vatican that recognized the institutional church as 
an autonomous and active participant in public life. The agree- 
ment signaled a new era of cooperation between throne and altar. 

Neoabsolutism, with its aim of creating a unified, supranational 
state, however, ran counter to the prevailing European trend. The 
empire's peoples could not be isolated from the larger nationalist 
struggles of the German, Italian, and Slavic peoples. In Hungary 
active resistance to the Austrian government declined, but passive 
resistance grew. During the Crimean War (1853-56), the situa- 
tion in Hungary made Austria vulnerable to economic and politi- 
cal pressure from Britain and France, the allies of Turkey against 
Russia. Thus, when Russia asked for Austria's support, Austria 
initially sought to mediate the conflict but then joined the western 
allies against Russia. By failing to repay Russia for its help in Hun- 
gary in 1849, Austria lost critical Russian support for its position 
in Germany and Italy. 

France took advantage of the estrangement between Austria and 
Russia to set up a military confrontation between Austrian and 
Italian nationalist forces. This opened the door to French military 
intervention in support of the Italians in 1859. Because Franz Joseph 
was unwilling to make the concessions that were Prussia's price 
for assistance from the German Confederation and because he 
feared the French might stir up trouble in Hungary, Franz Joseph 
surrendered Lombardy in July 1859. 

These failures did not bode well for the anticipated conflict with 
Prussia over German unification, so the emperor began to aban- 
don absolutism and create a more viable political base. He ex- 
perimented with various arrangements designed to attract the 
support of the military, the Roman Catholic Church, German liber- 
als, Hungarians, Slavs, and Jews, who were assuming a strong 
presence in the economic and political life of the empire. Urgently 
needing to resolve the tensions with the Hungarians, the govern- 
ment opened secret negotiations with them in 1862. The outline 
of a dual monarchy was already taking shape by 1865, but negoti- 
ations were deadlocked on the eve of the war with Prussia. 

Loss of Leadership in Germany 

Through the early 1860s, Austria maintained hope of retaining 
leadership in Germany because the smaller states preferred weak 
Austrian leadership to Prussian domination. Nonetheless, by mid- 
1864 Franz Joseph realized that war was inevitable if Austrian 
leadership were to be preserved. 



25 



Austria: A Country Study 



The immediate cause of the Seven Weeks' War between Aus- 
tria and Prussia in 1866 was Prussia's desire to annex the Duchy 
of Holstein. Austria and Prussia had together fought a brief war 
against Denmark in 1864 to secure the predominantly German 
duchies of Schleswig and Holstein for Germany. Pending final de- 
cision on their future, Prussia took control of Schleswig, and Aus- 
tria took control of Holstein. In April 1866, however, Prussia plotted 
with Italy to wage a two-front war against Austria that would en- 
able Prussia to gain Holstein and Italy to gain Venetia. Although 
Austria tried to keep Italy out of the war through a last-minute 
offer to surrender Venetia to it, Italy joined the war with Prussia. 
Austria won key victories over Italy but lost the decisive Battle of 
Koniggratz (Hradec Kralove in the present-day Czech Republic) 
to Prussia in July 1866 (see The Habsburg Military, ch. 5). 

Defeated, Austria agreed to the dissolution of the German Con- 
federation and accepted the formation of a Prussian-dominated 
North German Confederation, which became the basis of the Ger- 
man Empire in 1871 . The south German states — Bavaria, Baden, 
Wiirttemberg, and Hesse-Darmstadt — were accorded an "indepen- 
dent international existence" and, in theory, could have gravitat- 
ed toward Austria. Nevertheless, their military and commercial 
ties to Prussia militated against such an outcome. The province 
of Venetia, Austria's last Italian possession, was transferred to Italy. 

Austria-Hungary to the Early 1900s 
The Founding of the Dual Monarchy 

Defeat in the Seven Weeks' War demonstrated that Austria was 
no longer a great power. Looking to the future, Franz Joseph set 
three foreign policy objectives designed to restore Austrian leader- 
ship in Germany: regain great-power status; counter Prussian 
moves in southern Germany; and avoid going to war for the fore- 
seeable future. Because reconciliation with Hungary was a precon- 
dition for regaining great-power status, the new foreign minister, 
Friedrich Ferdinand von Beust, became a strong advocate of bring- 
ing the stalemated negotiations with the Hungarians to a success- 
ful conclusion. By the spring of 1867, a compromise had been 
reached and was enacted into law by the Hungarian Diet. 

The Compromise (Ausgleich) of 1867 divided the Habsburg Em- 
pire into two separate states with equal rights under a common rul- 
er, hence the term "Dual Monarchy." Officially, these states were 
Hungary and the "Kingdoms and Lands represented in the Parlia- 
ment," the latter being an awkward designation necessitated by the 



26 



Historical Setting 



lack of a historical name encompassing all non-Hungarian lands 
(see fig. 4). Unofficially, the western half was called either Austria 
or Cis-Leithania, after the Leitha River, which separated the two 
states. The officially accepted name of the Dual Monarchy was 
Austria-Hungary, also seen as the Austro-Hungarian Empire. 

The two national governments and their legislatures in Vienna 
and Budapest shared a common government consisting of a 
monarch with almost unlimited powers in the conduct of foreign 
and military affairs, a ministry of foreign affairs, a ministry of 
defense, and a finance ministry for diplomatic and military estab- 
lishments. In the absence of a shared parliament, discussion of the 
empire's common affairs was conducted by parallel meetings of 
delegates from the two national legislatures communicating with 
each other through written notes. A key topic of these meetings 
was the common commercial policy and customs union that had 
to be renegotiated every ten years. 

The Austrian parliament passed legislation implementing the 
Ausgleich in late 1867. This "December Constitution" was the 
product of German-speaking Liberals, who were able to dominate 
parliament because of a boycott by Czech delegates. The Decem- 
ber Constitution closely followed the constitution of 1849 and placed 
no significant restrictions on the emperor with regard to foreign 
and military affairs but did add a list of fundamental rights en- 
joyed by Austrians. The lower house of the Austrian parliament 
was elected through a highly restricted franchise (about 6 percent 
of the male population). Seats were apportioned both by province 
and by curiae, that is, four socioeconomic groups representing the 
great landowners, towns, chambers of commerce, and peasant com- 
munities. 

By building on the two dominant nationalities in the empire, 
German and Hungarian, dualism enabled Austria-Hungary to 
achieve relative financial and political stability. It did not, however, 
provide a framework for other nationalities, in particular the Slavs, 
to achieve equivalent political stature. Indeed, the Hungarian state 
used its power to preclude such an outcome. Hungary interpreted 
provisions in the Ausgleich as requiring Austria to retain its basic 
constitutional structure as a unitary state, so that any federalist ac- 
commodation with the Czechs would invalidate the Ausgleich and 
dissolve the Dual Monarchy. 

Final Defeat in Germany and Reconciliation with Prussia 

Because Russia was aligned with Prussia and because Britain 
had retreated into isolationism, Austria- Hungary turned to France 
as an ally in its bid to regain leadership in Germany. France wanted 



27 



Austria: A Country Study 




International boundary 


• 


Populated place 


Austria-Hungary boundary 


ITALY 


Country 


Boundary separating Austria and Hungary 


Dalmatia 


Historical region 


Note - Austria-Hungary governed Bosnia and 


25 


50 Kilometers 




Hercegovina from 1878-1918. 









25 50 Miles 



Figure 4. Austria- Hungary, 1867-1918 



gains in Germany at Prussia's expense and was receptive to an al- 
liance. Open cooperation with French expansionist ambitions, 
however, was inconsistent with Austria-Hungary's efforts to be the 
leader and defender of the German nation. The success of the alli- 
ance thus depended on France's position as the defender of the south 
German states against Prussia — which France failed to do. 

France declared war on Prussia and invaded German territory 
in July 1870. The south German states rallied to Prussia's side in 
the Franco-Prussian War, and Beust's patient effort to detach those 
states from Prussia lay in ruins. Austria watched helplessly as Prus- 
sia, the presumed underdog, quickly and soundly defeated France. 
In January 1871, Prussia founded the Second German Empire, 
uniting the German states without Austria. 

Unable to undo what Prussian military prowess had wrought 
in Germany, Austria-Hungary trimmed its sails accordingly. Count 



28 



Historical Setting 



Gyula Andrassy, a Hungarian, replaced Beust as foreign minister, 
and the empire's foreign policy began to reflect the anti-Russian 
sentiments of the Hungarians. Before 1871 ended, Austria-Hungary 
and Germany were working toward a united foreign policy. 

This diplomatic cooperation with Prussian-dominated Germa- 
ny contributed to the internal political stability of Austria- Hungary. 
Exclusion from a united Germany was a psychological shock for 
German Austrians because their claim to leadership in the Habs- 
burg Empire had rested in part on their leadership of the German 
nation. Cut off from Germany, they became just one of many na- 
tional groups in the Habsburg Empire and constituted only slight- 
ly more than one-third of Austria's population. Had Prussia 
remained hostile, Austria-Hungary's German population might 
have been the excuse for Prussian territorial ambitions similar to 
those harbored by the other nation-states that surrounded Austria- 
Hungary. Aligned with Austria-Hungary, however, Prussia dis- 
tanced itself from German nationalists in Austria-Hungary, and 
the annexation movement remained politically insignificant. But, 
because German Austrians no longer had their majority status 
guaranteed by participation in the larger German nation, many 
felt increasingly vulnerable and threatened. German Austrians thus 
became open to a nationalism based on ethnic fear and hostility 
that contrasted with the self-confident Liberal nationalism of earlier 
decades. 

The Eastern Question 

Having reconciled itself to exclusion from Germany and Italy, 
Austria- Hungary turned to the east, where declining Turkish power 
made the Balkans the focus of international rivalries. Foreign 
Minister Andrassy was opposed to any annexation of Balkan ter- 
ritories because that would have increased the empire's Slavic popu- 
lation. Ideally, he favored maintenance of Turkish authority in 
order to check the expansion of Russian influence. This option, 
however, was not viable. To prevent either Russia from replacing 
Turkey as the dominant power in the region or the already indepen- 
dent Balkan states (Serbia, Montenegro, Greece, and Romania) 
from dividing up the remaining Turkish territory, Austria-Hungary 
was forced to seek a partition of the Balkans with Russia. 

Because Germany was aligned with both Russia and Austria- 
Hungary, it acted as a moderating force on Russia to prevent war 
between its partners in the 1870s. So successful was Germany 
at limiting Russian gains after the costly Russo-Turkish War 
(1877-78), that Russia's relations with Germany cooled consider- 
ably. With Germany's support, Austria- Hungary acquired Bosnia 



29 



Austria: A Country Study 

and Hercegovina as part of the settlement to that war. Andrassy, 
however, did not directly annex Bosnia and Hercegovina but ob- 
tained the right of an Austro-Hungarian occupation, while Turkey 
retained sovereignty. 

With relations strained between Russia and Germany, Austria- 
Hungary exploited Germany's need to strengthen its position 
against France and obtained an anti-Russian alliance. Under the 
resulting Dual Alliance, Austria-Hungary and Germany pledged 
to help defend the other against an attack by Russia. In the event 
of war between Germany and France, however, Austria-Hungary 
promised nothing more than neutrality unless Russia were also in- 
volved. As favorable as the Dual Alliance appeared, it drew Austria- 
Hungary into Otto von Bismarck's web of alliances and diplomatic 
maneuverings. Austria-Hungary thus became party to conflicts with 
France and Britain, countries with which it had no directly con- 
flicting interests. The Triple Alliance signed by Germany, Italy, 
and Austria-Hungary in 1882, for example, mainly protected Italian 
and German interests against France and did nothing to resolve 
outstanding issues between Austria-Hungary and Italy. 

Great-power tensions in the Balkans eased in the 1890s, as Africa 
and the colonial territories in the Far East became the focus of com- 
petition among European powers. Although Austria-Hungary was 
not involved in this colonial competition, Russia was. Its interests 
in the Far East paved the way for an accommodation with Austria- 
Hungary to maintain the status quo in the Balkans. In 1903, 
however, Serbia, a Balkan country that European powers had as- 
signed to the Austro-Hungarian sphere of influence, launched an 
expansionistic program directed against Austria- Hungary. Without 
Russian support, however, Serbia's threat was not a major concern. 

Internal Developments in Austria 

The Czech boycott of the Austrian parliament enabled the Ger- 
man Austrian Liberals to dominate the government of Austria until 
the late 1870s. They used their position to block concessions to 
Czechs and Poles in the early days of the Dual Monarchy, and 
they further protected their interests in 1873 by altering the fran- 
chise law to increase the representation in parliament of their 
constituency — the urban, ethnically German population and as- 
similated Jews. The Liberals' legislative program focused on an- 
ticlerical measures, but conflict over foreign policy issues, not 
religious ones, caused the Liberals' fall from power in 1879. The 
Liberals opposed the annexation of Bosnia and Hercegovina — 
which was favored by the emperor — and claimed certain powers 



30 



Historical Setting 



in the conduct of foreign policy that Franz Joseph saw as an in- 
fringement on his sovereign authority. 

After the fall of the Liberals, a nonparty government known as 
the Iron Ring was formed under Eduard Taaffe. Intended to en- 
circle and limit the influence of the Liberals, the Iron Ring 
represented court interests and enjoyed broad support from cleri- 
cal parties, German Austrian conservatives, Poles, and Czech 
representatives, who had decided to end their boycott. Backed by 
this comfortable parliamentary majority, the executive branch was 
able to operate smoothly. Although the concessions given the Czechs 
in return for their support were linguistic and cultural rather than 
political, the concessions raised sensitive issues because the expanded 
use of the Czech language in Bohemian public life weighed heavily 
on the ethnic German minority. 

The major legislative initiative of the Taaffe government was 
the 1883 franchise reform. This measure broadened the socioeco- 
nomic base of the electorate and thus weakened the support of the 
Liberals while strengthening the conservatives. An even broader 
franchise reform was proposed in 1893 after the election of 1891, 
which had been conducted in an atmosphere of heightened ethnic 
tensions in Bohemia. The proposed reform would have given the 
vote to all male citizens over the age of twenty-five and thus dilut- 
ed still further the middle-class urban vote that the court associat- 
ed with fervid nationalism. The bill, however, was widely rejected 
by the conservative backers of the Iron Ring, and Taaffe resigned. 

Ethnic tensions, however, did not subside, even though a modi- 
fied version of the franchise legislation proposed in 1893 was ulti- 
mately enacted. With the parliament highly fragmented both 
nationally and politically, Minister-President Count Kasimir Badeni 
offered new concessions to the Czechs in 1897 to forge the majority 
coalition he needed to conduct customs and trade policy negotia- 
tions with the Hungarians. These concessions, which dealt with 
the use of the Czech language by the bureaucracy, inflamed Ger- 
man-speaking Austrians. Violent rioting on a near-revolutionary 
scale erupted not only in Bohemia but also in Vienna and Graz. 
The Badeni government fell. Because no effective majority could 
be assembled in the polarized parliament, the government increas- 
ingly used emergency provisions that allowed the emperor to enact 
laws when parliament was not in session. 

The political stalemate in parliament was a reflection of socioeco- 
nomic changes in the empire that were heightening tensions among 
social classes and nationalities. Although the economic and psy- 
chological impact of the economic crash of 1873 endured for some 
time, Austria experienced steady industrialization and urbanization 



31 



Austria: A Country Study 

in the late nineteenth century. By 1890 Austria stood midway be- 
tween the rural societies that bordered it on the east and south and 
the industrially advanced societies of Western Europe. 

The German-speaking middle class, including assimilated Jews, 
had been the first group to translate growing numerical and eco- 
nomic power into political leverage. Even after the 1879 fall of the 
Liberal government, which had represented this group's interests, 
the government had to consider the concerns of the German- 
speaking middle class in order to maintain political stability. 

In contrast to that of the middle class, the positions of the 
aristocracy and the Roman Catholic Church weakened. Individu- 
al aristocrats played prominent roles in the government, but the 
bureaucracy was assuming many functions once played by the 
aristocracy as a whole. For the church, the 1855 concordat between 
the empire and the Vatican had been a high-water mark for its 
formal role in political life. The Liberals' anticlerical legislation 
and abrogation of the concordat in 1870 curtailed the church's pub- 
lic presence and influence. Nonetheless, popular support for the 
church remained strong, and a new form of Catholic political par- 
ticipation was beginning to take shape based on a socially progres- 
sive platform endorsed by the 1891 papal encycylical Rerum Novarum. 
This largely urban movement coalesced into the Christian Social 
Party (Christlichsoziale Partei — CSP). Papal support was not suffi- 
cient to win the new party the approval of the conservative Austrian 
bishops, who continued to work through the older clerical-oriented 
parties. 

Initially, the CSP found strong support in Vienna and controlled 
the city administration at the turn of the century. Nonetheless, the 
party was unable to hold its desired base among industrial workers 
in the face of competition from the Social Democratic Workers' 
Party (Sozialdemokratische Arbeiterpartei — SDAP). Founded in 
1889 at a unity conference of moderate and radical socialists, the 
SDAP adhered to a revisionist Marxist program. The SDAP be- 
came a political home for many Austrian Jews uncomfortable with 
the growing anti-Semitism of the German nationalist movement, 
the other major political current of the time., 

Rising ethnic tensions made it difficult for political parties to ig- 
nore the influence of German nationalism in the closing decades 
of the nineteenth century. The Liberal movement faded, largely 
because of its resistance to becoming a specifically German party, 
and dissatisfied Liberals were key figures in the formation of new 
nationalist movements and parties. Even though the CSP and 
SDAP were based on political ideologies that transcended nation- 
al identity, they too were obliged to make concessions in their 



32 



Historical Setting 



program to German nationalism. In the late 1890s, all German- 
oriented parties, with the exception of the SDAP and the Catholic 
People's Party, united in the German Front. The specific demands 
of the German Front were modest, but by calling for recognition 
of a special position for Germans in light of their historic role in 
the empire, German Austrians were on a collision course with other 
national groups. 

The Final Years of the Empire and World War I 

The Crisis over Bosnia and Hercegovina 

Around 1906 the Balkans again became the focus of great-power 
rivalry, as Russia renewed its interest in the Balkans and became 
Serbia's great-power patron. A crisis erupted in 1908, when Tur- 
key began to be reorganized as a constitutional state. Bosnia and 
Hercegovina, which was Turkish territory under Austro-Hungarian 
administration, was invited to send delegates to the new Turkish 
parliament. Austria- Hungary responded by formally annexing Bos- 
nia and Hercegovina in violation of various international agree- 
ments. It quelled Turkey's objections with financial compensation. 
But by alienating Russia and Italy, the annexation was a costly 
diplomatic victory for Austria-Hungary at a time when the mili- 
tary alliance system of Europe was moving against it. Britain had 
resolved colonial rivalries with both France and Russia, paving the 
way for the cooperation of the three countries in the Triple Entente. 

Following the crisis over Bosnia and Hercegovina, Russia en- 
couraged the independent Balkan states to form what was intended 
to be an anti- Austro-Hungarian coalition. But the new coalition, 
called the Balkan League, was more interested in partitioning the 
remaining Turkish territories in the Balkans, and it defeated Tur- 
key in the First Balkan War in 1912. The Balkan allies turned on 
each other in 1913 in a war over the division of the former Tur- 
kish territories. In this Second Balkan War, Serbia doubled both 
its territory and its population. 

World War I 

Austria-Hungary considered the newly enlarged and Russian- 
backed Serbia to be the principal threat to its security because 
Serbian military intelligence supported anti-Habsburg groups and 
activities in Bosnia and Hercegovina. Thus, when the heir to the 
Habsburg crown, Franz Ferdinand, and his wife were assassinated 
in Sarajevo by Bosnian nationalists on June 28, 1914, the presump- 
tion of Serbian complicity was strong. The idea of a preemptive 



33 



Austria: A Country Study 



war against Serbia was not new in Vienna, and, despite the weak 
pretext, Germany indicated a willingness to back its ally. 

On July 23, Austria-Hungary presented Serbia with an ultima- 
tum designed to be rejected. The key demands were that Serbia 
suppress anti-Habsburg activities, organizations, and propaganda 
and that Habsburg officials be permitted to join in the Serbian in- 
vestigation of the assassination. Serbia responded negatively but 
appeared conciliatory. Nonetheless, Austria-Hungary declared war 
on Serbia on July 28 without further consultations with Germany. 

Russia's decision to mobilize on July 30 escalated the war be- 
yond a regional conflict by bringing into play the system of Euro- 
pean alliances. Because German war strategy depended on avoiding 
a two-front war, Germany had to defeat France before Russia could 
fully mobilize. Thus, Germany responded to Russia's mobiliza- 
tion by immediately declaring war on France and Russia. On 
August 4, Britain declared war on Germany. On August 6, Austria- 
Hungary declared war on Russia. Finally, on August 12, France 
and Britain declared war on Austria-Hungary. 

Once the major powers were engaged, they sought to enlist the 
support of the smaller powers. Despite its partnership with Austria- 
Hungary and Germany in the Triple Alliance, Italy was not bound 
by that treaty to join the war, and it declared its neutrality. Ger- 
many pressed Austria-Hungary unsuccessfully to cede to Italy Aus- 
trian territories it desired, in order to win Italian support. Because 
the Triple Entente powers readily promised transfer of the territo- 
ries in the event of victory, Italy entered the war on their side in 
April 1915. 

Although German and Austro-Hungarian military victories in 
the east during the spring of 1915 overcame the military disasters 
that Austria-Hungary experienced early in the war, the empire's 
internal economic situation steadily grew more precarious. Austria- 
Hungary was not prepared for a long and costly war. 

The death of Emperor Franz Joseph on November 21, 1916, 
deprived Austria-Hungary of his symbolic unifying presence. His 
twenty-nine-year-old grandnephew, Karl (r. 1916-18), was unpre- 
pared for his role as emperor. But by this time, the future of the 
monarchy no longer depended on what the emperor did; rather, 
its fate hinged on the outcome of the war. Despite revolutionary 
Russia's withdrawal from the war, military success in the east could 
not counter events in the west. The United States had entered the 
war on the side of the Allies in April 1917, and with the failure 
of its military offensive in the spring of 1918, Germany was no 
longer capable of continuing the war. 



34 



Historical Setting 

The End of the Habsburg Empire and the Birth of the Austrian 
Republic 

The dismantling of the Habsburg Empire had not been an ob- 
jective of the Allies. Following the collapse of the tsarist govern- 
ment in Russia, however, the Allies increasingly portrayed the war 
as pitting freedom and democracy against oppression and autocracy. 
This strategy benefited the representatives of Czech, Slovak, Hun- 
garian, and other nationalist committees-in-exile, which skillfully 
played on the theme of self-determination expressed in United States 
president Woodrow Wilson's Fourteen Points. Austria- Hungary 
was unable to put forward a meaningful program of reform while 
still preserving the monarchy and so could not successfully resist 
the centrifugal forces pulling it apart. By mid- 1918 the Allies be- 
gan recognizing the national committees-in-exile and made plans 
for an independent Poland and Czechoslovakia. By October 1918, 
when the Austro- Hungarian government was seeking an armistice, 
control of the empire's constituent lands was passing to national 
committees, including one representing German Austrians. 

On October 21, German Austrian delegates to the Austrian 
parliament voted to establish an Austrian state incorporating all 
districts inhabited by ethnic Germans. At the end of the month, 
the delegates established a coalition provisional government. On 
November 3, imperial authorities signed an armistice, bringing 
Austro-Hungarian participation in World War I to an official end. 
On November 1 1 , Karl renounced any role in the new Austrian 
state, and the next day the provisional government issued a con- 
stitution for the German Austrian Republic. 

The First Republic 

Overview of the Political Camps 

Conditioned to view themselves as the ruling elite of a suprana- 
tional empire by virtue of what they regarded as their superior Ger- 
man culture, German Austrians (including assimilated Jews and 
Slavs) were the national group least prepared for a post-Habsburg 
state. The provisional government formed at the end of the war in- 
cluded representatives from three political groups: the Nationalists/ 
Liberals, the Christian Social Party (Christlichsoziale Partei — CSP), 
and the Social Democratic Workers' Party (Sozialdemokratische 
Arbeiterpartei — SDAP). These three groups dominated political 
life in interwar Austria and reflected the split of Austrian society 
into three camps {Lager): pan-German nationalists, Catholics and 
Christian Socials, and Marxists and Social Democrats, respectively. 



35 



Austria: A Country Study 

The parliamentary bloc represented by the Nationalists/Liberals 
was the smallest and most internally divided. Seventeen nation- 
alist groups were unified in the Greater German People's Party 
(Grossdeutsche Volkspartei), commonly called the Nationals, which 
described itself as a ' 'national-anti-Semitic, social libertarian party." 
The political heirs of the Liberals, the Nationals drew their sup- 
port from the urban middle class and retained liberalism's strong 
anticlerical views. Unification (Anschluss) with Germany was the 
Nationals' key objective, and they were cool, if not openly hostile, 
toward restoration of the Habsburg Dynasty to rule in Austria. 
In rural Austria, another party, the Agrarian League (Landbund), 
endorsed a nationalist program in conjunction with a corporatist 
and anti-Semitic platform. Radical nationalists were few in number, 
and some, Adolf Hitler, for example, had emigrated to Germany. 
The National Socialist German Workers' Party (National - 
Sozialistische Deutsche Arbeiterpartei — NSDAP, or Nazi Party) 
represented this segment of the nationalist movement but was nu- 
merically insignificant during the 1920s. 

The NSDAP originated in prewar Bohemia, where the German 
Workers' Party (Deutsche Arbeiterpartei) drew on a virulentiy racist 
movement headed by Georg von Schonerer to put together an anti- 
Semitic, anti-Slav nationalist program hostile toward capitalism, 
liberalism, Marxism, and clericalism. In 1918 the party changed 
its name to the National Socialist German Workers' Party. After 
World War I, the party split into two wings, one in Czechoslova- 
kia among Sudeten Germans (German Austrians of Bohemia, 
Moravia, and Silesia), and one in Austria. A similar party was 
founded in Germany and eventually came under the leadership 
of Hitler. Although the Austrian party leader favored parliamen- 
tary participation and internal party democracy in contrast to Hit- 
ler's antiparliamentarianism and emphasis on the "leadership 
principle," the Austrian and German parties united in 1926 but 
maintained separate national organizations. 

The original Christian Social Party (Christlichsoziale Partei — 
CSP) had merged with one of the rural-based clerical parties in 
1907 and had become more conservative in outlook. Because the 
church had lost the political protection of the Habsburg Dynasty 
with the collapse of the monarchy in 1918, the church was increas- 
ingly reliant on the political power of the CSP to protect its in- 
terests. Nevertheless, the church hierarchy, which was distrustful 
of parliamentary democracy, remained cool toward the CSP. 

During the 1920s and early 1930s, the CSP was dominated by 
Ignaz Seipel, a priest and theologian who had served in the last im- 
perial ministry. The party was well disposed toward the Habsburg 



36 



Vienna's Karlsplatz art nouveau subway stop with baroque 

Karlskirche in the background 
Courtesy Austrian National Tourist Office, New York 

Dynasty and inclined toward its restoration under a conservative, 
constitutional monarchy. The CSP gave only conditional support 
for unification with Germany and emphasized Austria's distinct 
mission as a Christian German nation. In light of public opinion 
favoring unification, however, the party was circumspect in voic- 
ing its doubts. The CSP inherited an anti-Semitic strain from its 
association with the prewar nationalist movement. In addition, the 
close identification of Jews with both liberalism and socialism, which 
were the ideological foes of the CSP, made anti-Semitism an easy 
way to cultivate a political base. 

The Social Democratic Workers' Party (Sozialdemokratische 
Arbeiterpartei — SDAP) endorsed a revisionist Marxist program. 
Although it spoke of the dictatorship of the proletariat, it sought 
to gain power through the ballot box, not through revolution. Karl 
Renner, who headed the provisional government, was the chief 



37 



Austria: A Country Study 

spokesman for this revisionist program after the war, but leader- 
ship of the party was held by Otto Bauer, who vocally supported 
a more radical, left-wing position. Bauer's rhetoric helped the party 
outflank the Communist Party of Austria (Kommunistische Partei 
Osterreichs — KPO). But because CSP leader Seipel was given to 
similarly strong rhetoric, the two contributed to the polarization 
of Austrian society. The Social Democrats (members of the SDAP), 
were strong supporters of unification with Germany, their fervor 
declining only with the rise of the Nazi regime in the early 1930s. 

The Foundation of the First Republic 

Although the SDAP was the smallest of the three parliamentary 
blocs, it received a preeminent role in the postwar provisional 
government because it was perceived as best able to maintain public 
order in the face of the revolutionary situation created by economic 
collapse and military defeat. With Bauer's Marxist rhetoric and 
the party's strong ties to organized labor, the SDAP was able to 
outmaneuver the KPO for control and direction of workers' and 
soldiers' councils that sprang up in imitation of the revolutionary 
government in Russia. The SDAP suppressed the old imperial army 
and founded a new military force, the Volkswehr (People's De- 
fense), under SDAP control, to contain revolutionary agitation and 
guard against bourgeois counterrevolution. 

When parliamentary elections were held in February 1919, the 
SDAP won 40.8 percent of the vote, compared with 35.9 percent 
for the CSP and 20.8 percent for the Nationals. As a result, the 
Nationals withdrew from the coalition and left a SDAP-CSP 
government headed by Renner to negotiate a settlement to the war 
and write a constitution. At the peace talks in the Paris suburb 
of St. Germain, however, the Allies allowed no meaningful negoti- 
ations because Austria-Hungary had surrendered uncondition- 
ally. The Allies had decided that Austria was a successor state to 
Austria-Hungary, so the treaty contained a war-guilt and war- 
reparations clause and limitations on the size of Austria's military. 
Although the provisional government had declared the Austrian 
state to be a constituent state of the German republic, the treaty 
barred Austria from joining Germany without the consent of the 
League of Nations and compelled the new state to call itself the 
Republic of Austria rather than the German Austrian Republic. 
After Austria's parliament approved these unexpectedly harsh 
terms, the Treaty of St. Germain was signed on September 10, 
1919. 

In setting the territorial boundaries of the Austrian state, some- 
times referred to as the First Republic, the Allies were faced with 



38 



Historical Setting 



the basic problem of carving a nation-state out of an empire in which 
ethnic groups did not live within compact and distinct boundaries. 
Austria received the contiguous German or German-dominated 
territories of Upper Austria, Lower Austria, Styria, Carinthia, Tirol 
(north of the Brenner Pass), Salzburg, and Vorarlberg, as well as 
a slice of western Hungary that became the province of Burgen- 
land. Under the empire, however, no specifically "Austrian" iden- 
tity or nationalism had ever developed among these provinces. 
Thus, despite a common language and historical ties through the 
Habsburg Dynasty, pressure from the Allies was necessary to keep 
even these contiguous areas together. 

Although geographically contiguous and ethnically German, 
South Tirol was transferred to Italy as promised by the Allies when 
Italy joined the war. The Sudeten Germans were not geographi- 
cally contiguous and could not be included in the new Austrian 
state. As a result, the Sudeten Germans were incorporated in the 
new Czechoslovakia. Austria's population numbered 6.5 million, 
as against Czechoslovakia's 11.8 million, of whom 3.1 million were 
ethnic Germans. 

The constitution of 1920 established a bicameral parliament, with 
a lower house, the Nationalrat (National Council) elected directly 
by universal adult suffrage, and an upper house, the Bundesrat 
(Federal Council) elected indirectly by the provincial assemblies 
(see Government Institutions, ch. 4). In accordance with the SDAP 
desire for a centralized state, real political power was concentrat- 
ed in the Nationalrat. Significantly, however, none of the three 
major parties was truly committed to the state and institutions es- 
tablished by the constitution. The SDAP goal was an Austria united 
with a socialist Germany, and the party's inflammatory Marxist 
rhetoric caused the other parties to fear that the SDAP could not 
be trusted to maintain democratic institutions if it ever achieved 
a parliamentary majority. Although the CSP under Seipel came 
closest to accepting the idea of an independent Austria, it preferred 
a monarchy over a republic. Seipel himself voiced increasingly an- 
tidemocratic sentiments as the decade advanced. The Nationals 
were fundamentally opposed to the existence of an independent 
Austrian state and desired unification with Germany. 

Political Life of the 1920s and Early 1930s 

With traditional sources of food and coal located across new na- 
tional borders, Austria suffered extreme economic dislocation, and 
the country's economic viability was in doubt. Moreover, having 
settled the immediate questions of the peace treaty and constitu- 
tion, the SDAP and CSP found it increasingly difficult to cooperate. 



39 



Austria: A Country Study 

Unfortunately, the October 1920 parliamentary elections did not 
provide the basis for a stable government. The CSP increased its 
share of the vote to 41.8 percent, while the SDAP declined to 36.0 
percent and the Nationals to 17.2 percent. Seipel tried to form an 
antisocialist coalition with the Nationals, but that party was not 
yet prepared to set aside its own ideological differences with the 
CSP. Weak, neutral governments guided the country for the next 
two years. 

In 1922 Seipel assumed the office of chancellor (prime minister). 
By adroitly manipulating the European political situation and ac- 
cepting renewed prohibitions on union with Germany, he managed 
to obtain foreign loans to launch an economic stabilization plan. 
Although the plan stabilized the currency and set state finances 
on a sound course, it provided no solution to the underlying eco- 
nomic problems and dislocation, and it extracted a high social cost 
by cutting government social programs and raising taxes. 

Otto Bauer, leader of the SDAP, kept the party in self-imposed 
isolation after the collapse of the initial SDAP-CSP coalition in 
the belief that the natural role for a socialist party in a bourgeois 
democracy was opposition. Thus, Seipel remained the key public 
figure in Austrian national politics throughout the 1920s, even 
though he did not continuously serve as chancellor. Nevertheless, 
the CSP was not able to win an outright majority in the National- 
rat, and the SDAP registered steady gains among voters, polling 
41 percent of the vote in 1927 against 55 percent of the CSP- 
National coalition. Vienna, which was given the status of a province 
under the 1920 constitution, was the SDAP stronghold. Vienna's 
city government of Social Democrats purposely sought to make 
health and housing programs and socialist-inspired "workers 'cul- 
ture "of "Red Vienna" a model for the rest of Austria. 

Although the CSP had secured the suppression of the SDAP- 
controlled Volkswehr in 1922 when a more traditional army was 
established, the SDAP responded by forming the Republikanischer 
Schutzbund (Republican Defense League). Well armed and well 
trained, it numbered some 80,000 members by the early 1930s. 
Of even greater political significance, however, were the provincial- 
based homeland militias, variously called the Heimwehr (Home 
Guard) and the Heimatschutz (Homeland Defense). Independently 
organized, these militias initially lacked any overarching political 
ideology except anti- Marxism. Until 1927 they were not an effec- 
tive political force and were viewed by many, including Seipel, as 
a military reserve supplementing inadequate military and police 
forces. In the late 1920s, however, the Heimwehr gained greater 
ideological coherence from contact with Italian fascism. But with 



40 



Historical Setting 



the exception of the Styrian branch, the Heimwehr was unable to 
bridge differences with Austrian Nazis. For this reason, the Heim- 
wehr leader, Prince Ernst Riidiger von Starhemberg, founded a 
Heimwehr political wing, the Heimatbloc (Homeland Bloc), in 
1930. 

In the parliamentary election of 1930, the CSP experienced a 
severe setback, winning only sixty-six seats to the SDAP's seventy- 
two. The Heimatbloc picked up the seven seats lost by the CSP. 
Although the CSP-National coalition had broken down in the late 
1920s, a new government was formed that combined the CSP with 
the Nationals and the peasant-based Landbund. Eager for a politi- 
cal success to bolster its popular support, the government began 
negotiations with Germany for a customs union in March 1931. 
When France learned of the negotiations, however, it immediate- 
ly denounced the proposal as a violation of the international ban 
on Austrian-German unification. Under severe diplomatic pres- 
sure, Austria and Germany were forced to drop their plans, but 
not before France's economic retaliation had led to the collapse 
of Austria's largest bank, the Creditanstalt, in June 1931. 

In the wake of this foreign policy and economic disaster, Seipel 
sought a new coalition between the CSP and the SDAP but was 
rebuffed. With no other alternative, Seipel resurrected the CSP- 
National coalition. The growing political strength of the Nazis in 
Germany and the worsening economic conditions marked by the 
rise in unemployment from about 280,000 in 1929 to nearly 600,000 
in 1933, however, were effecting a political realignment in Aus- 
tria. In the spring of 1932, the Austrian branch of the Nazi Party 
registered important gains in local elections. Although the CSP lost 
important segments of its constituency to the Nazis, the parties in 
the nationalist camp suffered greater defections, especially after Nazi 
triumphs in Germany in early 1933. Austrian elections were in- 
creasingly three-way contests among the CSP, the SDAP, and the 
Nazi Party. 

The End of Constitutional Rule 

In May 1932, a new cabinet was formed under the leadership 
of Engelbert Dollfuss, a CSP member. Dollfuss's coalition, com- 
posed of the CSP, the Landbund, and the Heimatbloc, had a one- 
vote majority. Both the SDAP and the Nazi Party pressed for new 
elections, but Dollfuss refused, fearing defeat. Instead, he sought 
support from fascist Italy and the Heimwehr and increasingly re- 
lied on authoritarian measures to maintain his government. 

In early March 1933, parliamentary maneuvering by the SDAP, 
which was trying to block government action against a pro-Nazi 



41 



Austria: A Country Study 

labor union, created a procedural crisis in the Nationalrat. Urged 
on by the Italian dictator, Benito Massolini, Dollfuss exploited the 
confusion in the Nationalrat to end parliamentary government and 
began governing on the basis of a 1917 emergency law. Dollfuss 
outlawed the Nazi Party, the politically insignificant KPO, and 
the Republikanischer Schutzbund. All, however, continued to ex- 
ist underground. 

Seeking a firmer political footing than that offered by Italy and 
the coercive power of the police, military, and Heimwehr, Doll- 
fuss formed the Fatherland Front (Vaterlandische Front) in May 
1933. The front was intended to displace the existing political par- 
ties and rally broad public support for Dollfuss 's vision of a specif- 
ically Austrian nationalism closely tied to the country's Catholic 
identity. Dollfuss rejected union with Germany, preferring instead 
to see Austria resume its historical role as the Central European 
bulwark of Christian German culture against Nazism and com- 
munism. In September 1933, Dollfuss announced plans to organize 
Austria constitutionally as a Catholic, German, corporatist state. 

The opportunity to put the corporatist constitution in place came 
after a failed socialist uprising in February 1934 triggered by a police 
search for Schutzbund weapons in Linz. An unsuccessful general 
strike followed, along with artillery attacks by the army on a Vienna 
housing project. Within four days, the socialist rebellion was 
crushed. Both the SDAP and its affiliated trade unions were banned, 
and key leaders were arrested or fled the country. Dollfuss 's con- 
stitution was promulgated in May 1934, and the Fatherland Front 
became the only legal political organization. Austrian society, 
however, remained divided into three camps: the nationalist bloc 
that was associated with the Heimwehr and the bloc represented 
by the CSP struggled for control of the Fatherland Front; the so- 
cialist bloc fell back on passive resistance; and the nationalist bloc 
dominated by the Nazis boldly conspired against the state with sup- 
port from Germany. 

Although a variety of political labels have been applied to the 
Dollfuss regime, it eludes simple classification. Its ideology harked 
back to early religious and romantic political critiques of liberal 
democracy and socialism. The regime incorporated many elements 
of European fascism, but it lacked two features widely viewed as 
essential to fascism: adherence to the "leadership principle," and 
a mass political base. In any event, the complex corporatist struc- 
tures of the 1934 constitution, in which citizens participated in so- 
ciety on the basis of occupation and not as individuals, were never 
fully implemented. And the regime's relations with the Roman 
Catholic Church were never as straightforward as the regime's 



42 



Historical Setting 



ideology suggested. Although the incorporation of a new concor- 
dat with the Vatican in the 1934 constitution bespoke harmony 
between church and state, in practice the concordat became the 
bulwark on which the church claimed its autonomous rights. Long- 
standing rivalries between church and state actually intensified as 
state-affiliated organizations intruded on what the church viewed 
as its interests in youth, family, and educational policies and or- 
ganizations. 

Growing German Pressure on Austria 

In June 1934, Hitler and Mussolini had their first meeting. Mus- 
solini defended his support of Dollfuss, while Hitler denied any 
intent to annex Austria but made clear his desire to see Austria 
in Germany's sphere of influence. Austrian Nazis, however, were 
embarked on a more radical course. They conspired to seize top 
government officials and force the appointment of a Nazi-dominated 
government. 

The Dollfuss government learned of these plans before the putsch 
began on July 25 but did not make adequate preparations. Although 
the army and the Heimwehr remained loyal and the coup failed, 
Dollfuss was killed. Strong international indignation over the putsch 
forced Hitler to rein in the Austrian Nazis, but Hitler's goal re- 
mained the eventual annexation (Anschluss) of Austria. 

Dollfuss was succeeded as chancellor by Kurt von Schuschnigg, 
another of Seipel's CSP proteges. Schuschnigg' s political survival 
directly depended on Italian support for an independent Austria, 
but by 1935 Mussolini was already moving toward accommoda- 
tion with Hitler and began to advise Schuschnigg to do the same. 
Schuschnigg was in fact prepared to make concessions to Germa- 
ny, if Hitler in turn would make a clear statement recognizing Aus- 
trian independence. 

Schuschnigg, however, did not understand the degree to which 
even moderate nationalists, whose support he needed, were already 
operating as fronts for Hitler and the Nazis. Thus, in the agree- 
ment signed with Germany on July 11, 1936, Hitler gave Austria 
essentially worthless pledges of Austrian independence and 
sovereignty, while Schuschnigg agreed to bring into his govern- 
ment members of the "National Opposition," who, unbeknownst 
to him, were taking their orders from Berlin. 

The 1936 agreement furthered Germany's desire to isolate Aus- 
tria diplomatically and encouraged other European countries to 
view Austrian-German relations as a purely internal affair of the 
German people. Bereft of external support and in no position to 
resist German pressure, Schuschnigg agreed to meet Hitler in 



43 



Austria: A Country Study 

Berchtesgaden on February 12, 1938. Hitler used the meeting to 
intimidate the Austrians with an implicit threat of military inva- 
sion, and Schuschnigg accepted a list of demands designed to 
strengthen the political position of the Austrian Nazis. Although 
the list did not include the legalization of Austria's Nazi Party, 
the Nazis and their sympathizers began to come into the open. 

On his return to Vienna, Schuschnigg began secret plans for one 
last desperate bid to preserve Austrian sovereignty: a plebiscite 
designed to secure a yes vote "for a free and German, indepen- 
dent and social, for a Christian and united Austria, for peace and 
work and equality of all who declare themselves for Nation and 
Fatherland." Representatives of the SDAP agreed to call a plebi- 
scite in exchange for various concessions. 

Hitler recognized that the plebiscite would be a new obstacle to 
Anschluss and a symbolic defeat for Nazi Germany, so he quickly 
moved against it. The German army began preparing for an in- 
vasion on March 10, and Nazi sympathizers in the Austrian cabi- 
net demanded that the plebiscite be postponed. Schuschnigg agreed 
to cancel it altogether and then acceded to demands for his resig- 
nation. Nonetheless, on March 12, Hitler sent the German army 
into Austria. 

The Anschluss and World War II 

Absorption of Austria into the Third Reich 

Most Austrian proponents of the Anschluss had foreseen a gradual 
coordination and merger of the two German states that would 
preserve some semblance of Austrian identity. But, influenced by 
the tumultuous welcome he received on his arrival, Hitler made 
an impromptu decision for quick and total absorption of Austria 
into the Third Reich. 

The Anschluss violated various international agreements, but 
the European powers offered only perfunctory opposition. Italy had 
acquiesced to the invasion beforehand, and in return Hitler later 
agreed to allow Italy to retain the South Tirol despite his aggres- 
sive policies elsewhere to bring all German populations into the 
Third Reich. Britain was following a policy of appeasement in 1938 
and was unwilling to risk war over Austria's independence, while 
France, traditionally the strongest foe of German unification, was 
incapable of unilateral military action. 

To provide a legal facade for the Anschluss, Hitler arranged a 
plebiscite for April 10, 1938. The Nazis portrayed the plebiscite 
as a vote on pan-Germanrsm and claimed a 99.7 percent vote in 
favor of the Anschluss. Although the outcome was undoubtedly 



44 



Historical Setting 



influenced by Nazi intimidation, the Anschluss enjoyed broad popu- 
lar support. Nevertheless, the positive vote reflected the Austri- 
ans' desire for change far more than it did widespread support for 
Hitler and Nazism. Unification offered a way out of the political 
turmoil of the First Republic, and ties with the larger German econ- 
omy promised economic revitalization. Many Austrians probably 
also harbored unrealistic notions of Austria's position within the 
Third Reich, expecting an arrangement similar to the Dual Monar- 
chy in which Austria and Germany would be equal partners. And 
the full dimensions of Nazi barbarism were not yet apparent. Un- 
derlying these factors, however, was the widespread appeal of pan- 
Germanism that cut across political lines. Austrians had traditionally 
thought of themselves as Germans, and the Austrian nationalism 
cultivated by Dollfuss and Schuschnigg had not taken root. 
Although the SDAP had moderated its long-standing support for 
unification when Hitler came to power in Germany, Karl Renner 
urged a yes vote in the Nazi-organized plebiscite. Once unifica- 
tion was a fact, other Socialist leaders felt that the Nazi regime 
was not sufficient reason to reject the fulfillment of what they viewed 
as a progressive goal of German nationalism. 

Hitler moved quickly to suppress what little independent iden- 
tity and national unity Austria had. The name Austria was banned, 
provinces were freed of central administration from Vienna, and 
provincial loyalty and identification were cultivated. In addition, 
Austrian Nazis and Nazi sympathizers who might have become 
effective national leaders were transferred to relatively unimpor- 
tant jobs in the administration of the Third Reich or, after World 
War II began, were sent to administer the occupied territories. 
Thus, a disproportionate number of Austrians came to be in charge 
of the bureaucracy overseeing the implementation of the Nazis' 
extermination of the Jews and other peoples and groups deemed 
undesirable. 

Nazi Economic and Social Policies 

Between 1938 and mid- 1940, the Nazi administration in Aus- 
tria focused on stimulating the economy and relieving social dis- 
tress in order to win popular support, woo the working class away 
from socialism, and enable Austria to contribute to the German 
war machine. By early 1939, the Austrian economy was recover- 
ing, and unemployment was falling rapidly. 

Policies designed to speed economic efficiency and integration 
with Germany led to the rise of large firms and to the relocation 
of industry from the east to the Austria-Germany border in the west. 
Although these changes brought much of the Austrian economy 



45 



Austria: A Country Study 



under the control of the Third Reich, the economy was modern- 
ized and diversified. Thus, in spite of the wartime damage done 
to the Austrian economy and economic infrastructure, the An- 
schluss years helped overcome the belief that Austria was econom- 
ically inviable and laid the foundation for the mixed economy of 
the postwar years. 

These economic advances, however, came hand-in-hand with 
the Nazis' political repression and barbaric racial policies, of which 
the Jews were the principal victims. Unification with Nazi Ger- 
many legitimized the full venting of Austria's anti-Semitic politi- 
cal heritage in which the pronounced Jewish presence in key areas 
of economic, political, and cultural life — especially in Vienna — 
had associated Jews with many developments in Austrian society 
that were opposed by the country's conservative, rural, and Catholic 
population. 

The Jewish population of Austria — almost all of whom lived in 
Vienna — numbered around 220,000 in 1938. In general, Nazi anti- 
Semitic legislation and policies were imposed more quickly and more 
comprehensively in Austria than in Germany, and Austria became 
the testing ground for the political acceptability of policies later 
adopted in Germany. After allowing a wave of violent popular anti- 
Semitism in the weeks immediately after the Anschluss, the Nazis 
systematized anti-Semitic harassment. Laws and regulations were 
implemented to drive Jews from the economic sector, and out of 
Austria in general, in an orderly manner to ensure that the transi- 
tion did not disrupt the economy or cause the loss of economically 
valuable assets. Initially, Jews were encouraged to emigrate — after 
they had been stripped of money and assets — and the Central Office 
for Jewish Emigration (Zentralamt jiidischer Auswanderung — ZjA) 
was set up in Vienna to streamline the emigration process. In 1938 
about 80,000 Jews left Austria, legally and illegally, and ultimately 
some 150,000 fled. In October 1941, however, Germany's policy 
of encouraging emigration, already made difficult by the war, was 
replaced with policies to exterminate the Jews. The ZjA, which 
had been expanded to the occupied countries, organized the regis- 
tration and transportation of Jews to death camps to implement 
the so-called Final Solution. About one-third of Austria's Jewish 
population is estimated to have died in the Holocaust. In addi- 
tion to the Jews, there were other victims of murderous Ger- 
man nationalism. Austrian Slavic minorities, such as the Czechs, 
Slovaks, Slovenes, and Croats, for example, were targeted for 
assimilation, deportation, or extermination (see Social Minorities, 
ch. 2). 



46 



Historical Setting 



Repression and Compliance 

In comparison with non-German minorities, the political repres- 
sion suffered by German Austrians was lenient but still effective 
in preventing significant organized resistance. The left had already 
been the target of political repression before the Anschluss, but as 
early as March 1938, conservative political leaders associated with 
the Dollfuss-Schuschnigg regime were also subject to arrest and 
detention. Some 20,000 people were arrested in the early days of 
the Anschluss. Most were quickly released, but some, like Schusch- 
nigg, were held at the Dachau concentration camp throughout the 
Nazi era. During the entire 1938-45 period, some 100,000 Aus- 
trians were arrested on political charges. About 34,000 of these died 
in prisons or concentration camps, and some 2,700 were executed. 

Prior to the Anschluss plebiscite, the Nazis courted and received 
the support of the Roman Catholic hierarchy for annexation. Af- 
ter the plebiscite, the church desired to maintain loyal coopera- 
tion with what was perceived as legitimate state authority, but the 
Nazis were just as eager to eliminate the church's influence in so- 
ciety on both the institutional and the ideological level. In July 1938, 
the government declared the 1934 concordat void and closed Catho- 
lic education institutions, dissolved some 6,000 church-affiliated 
associations, and took control of the Catholic press. In August re- 
lations between the church hierarchy and the state were broken 
off. Although it did not see its role as supporting open resistance 
to the Nazi state, the Catholic Church, as the only legal entity 
propagating an ideology intrinsically hostile to Nazism, was a fo- 
cus of opposition to the regime and was closely watched by the state. 
The persecution of the church over the next several years was 
designed to gradually wear it down by depriving it of resources 
and institutional unity. These measures, which evoked popular 
resentment, were eased in late 1941 because of the need to main- 
tain public support of the regime during the war. Nevertheless, 
by detaching the church from the state, the policies had the effect 
of increasing the church's legitimacy and credibility and helped 
lay the groundwork for a more positive redefinition of the church's 
role in society after the war. 

World War II and the Defeat of Nazi Germany 

In a strict sense, Austria was not a participant in World War 
II because it did not formally exist when the war began with the 
invasion of Poland in September 1939, On an individual level, 
however, some 800,000 Austrians were drafted into the army (the 
German Wehrmacht), and another 150,000 served in the Waffen 



47 



Austria: A Country Study 

SS, an elite Nazi military unit. Austrians were integrated into Ger- 
man units, and no specifically Austrian military brigades were 
formed. 

Austrians loyally supported Germany through the early years 
of World War II. The early German military victories and Aus- 
tria's geographic location beyond the reach of Allied bombers shield- 
ed the Austrian population from the full impact of the war. Only 
after the German defeat at the Battle of Stalingrad in early 1943, 
when the course of the war increasingly turned against Germany, 
did popular support for the war and for the Anschluss begin to 
erode. 

More important for Austria's future, however, was the evolu- 
tion in the Allies' position on Austria. In November 1943, the for- 
eign ministers of the Soviet Union, Britain, and the United States 
met and issued the Moscow Declaration. In contrast to the earlier 
Allied acceptance of the Anschluss, the declaration described Aus- 
tria as "the first victim of Hitlerite aggression" and called for the 
reestablishment of an independent Austria. At the same time, 
however, the declaration also held Austria liable for its participa- 
tion in the war, effectively giving it the status of an enemy state. 

Allied advances in Italy in 1943 enabled bombers regularly to 
attack Austrian industrial and transportation centers. The winter 
of 1944-45 saw an intensification of the air campaign and steady 
advances toward Austria by the Soviet Union's Red Army. On 
March 30, 1945, the Red Army entered Austrian territory and cap- 
tured Vienna on April 1 3 . Although the Germans resisted the Soviet 
advances into eastern Austria, the Western Allies — the United 
States, Britain, and France — met minimal resistance as they ad- 
vanced into the country. United States forces began entering Aus- 
tria on April 30, and French and British troops soon followed. On 
May 8, 1945, Germany surrendered unconditionally. 

Restored Independence under Allied Occupation 

Foundation of the Second Republic 

As the Soviet troops advanced on Vienna, they occupied the town 
where Socialist leader Karl Renner lived in retirement. Despite 
his anti-Soviet reputation, Renner was chosen by the Soviet lead- 
ers to form and head a provisional government, apparentiy believing 
the aging politician would be an easily manipulated figurehead. 
Renner, however, established authority based on his leadership role 
in the last freely elected parliament, not on the backing of the Soviet 
Union. Conditions did not permit the members of the old parlia- 
ment to be summoned, as had been done in 1918, so Renner turned 



48 



St. Stephen's Cathedral, Vienna 
Courtesy Embassy of Austria, Washington 



49 



Austria: A Country Study 



to the leaders of the three nonfascist parties that the Soviet leaders 
had already allowed to become active and established a provisional 
city administration in Vienna in early April. The three parties con- 
sisted of the Socialist Party of Austria (Sozialistische Partei 
Osterreichs — SPO), a reorganization of the SDAP; the Austrian 
People's Party (Osterreichische Volkspartei — OVP), a reorgani- 
zation of the CSP; and the Communist Party of Austria (Kom- 
munistische Partei Osterreichs — KPO). 

Renner apportioned ministries in the provisional government's 
cabinet roughly based on the political balance of the pre- 1934 era, 
but the nationalist bloc was excluded and Communist representa- 
tion increased. The SPO held ten ministries; the OVP, nine; and 
the KPO, only three, but these included the important ministries 
of interior, which controlled the police, and of education. Three 
additional ministries were held by members without party affilia- 
tion. Because of widespread distrust of the Communists, Renner 
created undersecretary positions for the two other parties in the 
Communist-headed ministries. 

On April 27, 1945, the provisional government issued a decree 
nullifying the Anschluss and reestablishing an independent, 
democratic Republic of Austria under the 1920 constitution as 
amended in 1929. Germany had yet to surrender, however, and 
the formation of a provisional government in Soviet-occupied Aus- 
tria surprised the Western Allies, who had yet to enter Austria. 
The Western Allies feared that the provisional government was a 
puppet of the Soviet Union and declined to recognize it. This de- 
cision left the Renner government dependent on the Soviet Union 
but forced it to allow the provisional government the means to es- 
tablish reasonable credibility so Western acceptance could be won. 
Thus, as pre- 1938 political figures became active in the areas oc- 
cupied by United States, British, and French troops, the Renner 
government was allowed to establish contact with them despite in- 
itial Soviet plans to seal off its occupation zone. 

Four Power Occupation and Recognition of the Provisional 
Government 

The four Allied powers had not agreed to any firm plans for Aus- 
tria prior to the war's end, and only in early July 1945 were the 
borders dividing the country into four occupation zones finally 
set. Vienna's city center was placed under Four Power control, 
while the rest of the city was divided into specific occupation zones. 
Supreme authority in Austria was wielded by the Allied Council, 
in which the Four Powers were represented by their zonal 



50 



Historical Setting 



commanders. Each of the four Allies held veto power over the de- 
cisions of the council. 

The Allied Council held its first meeting in early September, 
but the Western Allies still declined to recognize the Renner govern- 
ment. Soon thereafter the provisional government held a meeting 
in Vienna attended by representatives from parties from all the 
occupation zones. Unlike the situation after World War I, the 
provinces displayed no separatist tendencies — the experience of the 
Anschluss and World War II had forged an appreciation of a com- 
mon Austrian identity. The provisional government was expand- 
ed to accommodate national representation, and the representatives 
agreed to national elections. Because of these developments, the 
Allied Council recognized the provisional government on October 
20, 1945. 

The 1945 Election and Consolidation of the Austrian Government 

The first national election since 1930 was held on November 25, 
1945. Nazi Party members were barred from participation. This 
exclusion sharply limited electoral participation by the nationalist 
camp, and no party was formed to represent its viewpoint. The 
OVP was thus able to monopolize the entire anti-left vote. Voters 
gave overwhelming support to the two democratic parties: the OVP 
received nearly 50 percent of the vote and eighty-five seats in the 
Nationalrat, and the SPO received 45 percent of the vote and 
seventy-six seats. The KPO received only 5 percent — well below 
its anticipated 25 percent — and four seats. 

Although the OVP thus held an absolute majority in parliament, 
the government, headed by Chancellor Leopold Figl of the OVP, 
preserved the three-party coalition. The distribution of cabinet seats 
was adjusted, however, with the KPO receiving only a specially 
created and unimportant Ministry for Electrification. In Decem- 
ber parliament elected Renner to the largely ceremonial position 
of president of the republic. With the Austrian government clearly 
evolving along democratic lines, the Western Allies grew more sup- 
portive, and the Soviet Union grew increasingly hostile. 

In 1946, however, the Soviet Union agreed to changes in the 
Four Power Control Agreement that governed the relationship 
between the Four Powers and the Austrian government, thus weak- 
ening their influence. Originally, Austrian legislation had to be 
unanimously approved by the Allied Council, effectively giving each 
of the Allies veto power. In light of the Austrian government's 
democratic bent, the Western Allies favored allowing laws passed 
by the government to take effect unless the Allied Council unani- 
mously rejected them. Although the Soviet Union was generally 



51 



Austria: A Country Study 

opposed to surrendering its veto power, it hoped to extract an agree- 
ment from the Austrians that would give the Soviet Union effec- 
tive control over Austrian petroleum resources and thus did not 
want the other Allies to be able to veto any eventual agreement. 
In June 1946, the Allied powers agreed to a compromise. Agree- 
ments between one of the occupying powers and Austria would 
not be subject to a veto. "Constitutional laws" would require the 
approval of the Allied Council and thus remain subject to vetoes 
by the individual Allies, but all other laws would take effect in thirty- 
one days unless rejected by the council. 

The Soviet Union only realized the implications of the new Con- 
trol Agreement when a dispute arose over German assets in Aus- 
tria. In early July 1946, the Soviet Union confiscated German assets 
in its occupation zone as war reparations — mines, industrial facil- 
ities, agricultural land, and the entire Austrian oil production in- 
dustry. To protect the Austrian economy from such Soviet seizures, 
the Austrian government nationalized German assets. The Soviet 
Union attempted to veto the nationalization law but was rebuffed 
by the other Allies, who made it clear that the Austrian govern- 
ment had wide latitude in determining whether a particular law 
was a constitutional law or not. Although the Soviet Union was 
able to prevent implementation of the nationalization law in its oc- 
cupation zone, the 1946 Control Agreement significantly enhanced 
the power of the Austrian government. By 1953 more than 550 
laws had been implemented over the objection of the Soviet Union. 

Consolidation of Democracy 

The experience of the Anschluss and Nazi rule — which for many 
Austrian politicians had included imprisonment at Dachau — 
deepened the commitment of the OVP and SPO to parliamentary 
democracy and Austrian statehood. The electorate remained divided 
into three political camps — socialist/Marxist, Catholic, and nation- 
alist/liberal — but cooperation replaced extreme political polari- 
zation. 

The SPO ratified the moderate social democratic and anticom- 
munist outlook of Renner, while downplaying the legacy of Austro- 
Marxism associated with Otto Bauer, the party's leader after World 
War I. Over the objections of the left wing, the party rejected an 
alliance with the KPO, endorsed cooperation with the OVP, and 
sanctioned the rebuilding of a capitalist economy tied to the West. 
It also decided to seek broad support beyond its working-class base. 

The OVP underwent a similar transformation. Many of its post- 
war leaders, drawn largely from people associated with the pre- 
war CSP trade unions and peasant organizations, had developed 



52 



Historical Setting 



personal relationships with socialist leaders during their time at 
Dachau. After the war, they advanced a program emphasizing free- 
dom and social welfare. Although essentially a Christian democratic 
party, the OVP sought to broaden its constituency and downplayed 
its confessional identification. No formal organizational ties were 
established with the Roman Catholic Church, and clerics were 
barred from running for office on the party's ticket. 

Denazification posed a special problem for the emerging demo- 
cratic society, often referred to as the Second Republic. Favorable 
Allied treatment of Austria was based in part on the premise that 
it was a liberated victim of Nazi aggression and not a Nazi ally. 
Thus, the government wanted to avoid any suggestion of collec- 
tive guilt while at the same time prosecuting individual Nazis. The 
party and its affiliates were banned, and ex-members were required 
to register. Approximately 536,000 did so by September 1946. The 
government attempted to draw a distinction between committed 
Nazis and those who had joined because of economic, social, or 
personal coercion. Thus, the presumably more committed pre- 1938 
Nazis were dismissed from the civil service and a variety of other 
professions. Special tribunals were created to try war crimes. 

Following the 1945 parliamentary election, the Allies sought more 
extensive denazification. In February 1947, the Figl government 
enacted the National Socialist Act. The law distinguished between 
"more implicated" persons, such as high party officials, and "less 
implicated" persons, such as simple party members. Individuals 
in both categories were subject to fines and employment restric- 
tions, but with different levels of severity. By 1948, however, po- 
litical and popular support for what was perceived as indiscriminate 
denazification was waning. Ex-Nazis and their families accounted 
for nearly one-third of the population, and both major parties feared 
that the stability of Austrian political and civil society would be 
undermined if they were not eventually reintegrated. In June 1948, 
the government promulgated the Amnesty Act, which restored full 
citizenship rights to the less implicated ex-Nazis before the 1949 
election. Some 42,000 people, however, those categorized as more 
implicated, remained excluded from full participation in the na- 
tion's life. 

Both the SPO and the OVP actively solicited the electoral sup- 
port of ex-Nazis, but this new bloc of voters also enabled the for- 
mation of a successor party to the prewar parties in the 
nationalist-liberal camp. The SPO encouraged the formation of 
the new party, known as the League of Independents (Verband der 
Unabhangigen — VdU), expecting that it would split the antisocialist 



53 



Austria: A Country Study 

vote and thus weaken the OVP. In the October 1949 parliamen- 
tary election, however, the SPO lost nine seats, compared with the 
eight lost by the OVP. The VdU, with nearly 12 percent of the 
vote, won sixteen of these seventeen seats. The KPO, with 5 
percent of the vote, increased its representation from four to five 
seats. Although the OVP thus lost its absolute majority in the 
Nationalrat, it was still the largest party, with seventy-seven seats 
and 44 percent of the vote. The SPO held sixty-seven seats, hav- 
ing won nearly 39 percent of the vote. The OVP and the SPO 
formed another coalition government with Figl as chancellor, con- 
tinuing what was to become known as the "grand coalition." 

To limit conflict between themselves, the coalition partners de- 
vised a system to divide not only cabinet ministries but also the 
entire range of political patronage jobs in the government and na- 
tionalized industries based upon each party's electoral strength. 
This proportional division of jobs, called the Proporz system, be- 
came an enduring feature of coalition governments. 

Austria's Integration with the West 

Early Soviet expectations for domination of Austria were pinned 
on a serious misreading of the KPO's electoral strength, and real- 
ity forced the Austrian Communists and their Soviet backers to 
turn to extraparliamentary means. With the Soviet Union occupy- 
ing Austria's industrial heartland, the KPO hoped first to gain con- 
trol of the labor movement and then to exploit popular discontent 
with the difficult postwar economic situation to bring mass pres- 
sure to bear on the government. As part of its overall strategy, the 
KPO sought to weaken the SPO by encouraging party factional- 
ism and to undermine the cooperation between the two major par- 
ties. Similar tactics successfully brought Communists to power in 
neighboring East European countries in the late 1940s. But in Aus- 
tria, Socialists united around Renner's social democratic approach 
and managed to outflank the Communists for worker support, as 
they had done after World War I. 

In 1947 and 1948, the Soviet Union attempted to block Aus- 
tria's participation in United States-sponsored aid programs, in- 
cluding the European Recovery Program (known as the Marshall 
Plan), and in the fall of 1947 the KPO pulled out of the coalition 
government over this issue. Ironically, the provisions that the Soviet 
Union itself had sought in the 1946 Control Agreement enabled 
Austria to freely sign the aid agreements and join the Organisa- 
tion for European Economic Co-operation (OEEC), the body 
charged with planning how to use the Marshall Plan. Member- 
ship in the OEEC facilitated Austria's economic integration with 



54 



The State Treaty of 1955, which ended Austria 's occupation and restored the 
country's sovereignty, is displayed by its signatories in Vienna. 

Courtesy Embassy of Austria, Washington 

the West and provided the economic basis for a stable parliamen- 
tary democracy in the postwar period. 

The 1955 State Treaty and Austrian Neutrality 

A key objective of post- 1945 Austrian governments was ending 
the Four Power occupation and preventing the permanent divi- 
sion of Austria. The Allies' greater preoccupation with Germany 
delayed formal treaty negotiations with Austria until January 1947. 
By then, however, the larger strategic issues of the Cold War over- 
shadowed the negotiations. The Soviet Union dropped its support 
for Yugoslav territorial claims against Austria in 1948 when Yu- 
goslavia broke with the Soviet Union, but new issues arose to block 
progress toward ending the occupation: the Berlin blockade of 1948; 
the founding of the North Atlantic Treaty Organization (NATO) 
and the division of Germany into two rival states in 1949; and the 
start of the Korean War in 1950. 

Following Soviet leader Joseph Stalin's death in March 1953, 
the Austrian government, headed by the newly elected chancel- 
lor, Julius Raab, sought to break the stalemate by proposing that 
Austria promise not to join any military bloc. The Indian ambas- 
sador to Moscow, acting as intermediary for the Austrians, went 



55 



Austria: A Country Study 

further and suggested permanent neutrality as the basis for a treaty. 
The Western Allies did not favor this proposal, and the Soviet Union 
continued to insist on the priority of a settlement in Germany. 

In late 1954 and early 1955, however, the Western Allies and 
the Soviet Union feared that the other side was preparing to in- 
corporate its respective occupation zones into its military bloc. In 
February the Soviet Union unexpectedly signaled its willingness 
to settle the Austrian question. In April a delegation composed of 
Raab, Figl, Adolf Scharf, and Bruno Kreisky went to Moscow. 
Four days of intense negotiations produced a draft treaty premised 
on permanent Austrian neutrality. The Western Allies only grudg- 
ingly accepted the draft for fear that it would be a model for Ger- 
man neutrality. They particularly objected to a proposed Four 
Power guarantee of Austrian neutrality, believing that it would pro- 
vide an opportunity for Soviet intervention in Austria. Under strong 
Western opposition, the Soviet Union dropped the proposal. 

On May 15, 1955, the State Treaty was signed. The treaty for- 
bade unification with Germany or restoration of the Habsburgs 
and provided safeguards for Austria's Croat and Slovene minori- 
ties. Austrian neutrality and a ban on foreign military bases in Aus- 
tria were later incorporated into the Austrian constitution by the 
Law of October 26, 1955. The 40,000 Soviet troops in Austria were 
withdrawn by late September. The small number of Western troops 
that remained were withdrawn by late October. 

The Grand Coalition and the Austrian People's Party 
Coda, 1955-70 

Foreign Policy in the Late 1950s and the 1960s 

After the signing of the State Treaty, Austria's foreign policy con- 
cerns focused on three issues: South Tirol, European economic in- 
tegration, and the meaning of neutrality. The status of the ethnically 
German province of South Tirol had been an Austrian concern ever 
since the province's transfer to Italy after World War I. Austria 
hoped that Italy's participation on the losing side of World War II 
might open the door to the Allied powers' awarding of the disputed 
territory to Austria. But the strategic interests of the Western Allies 
after the war forced Austria to settle for a 1 946 agreement in which 
Italy promised South Tirol autonomous rights. 

In 1948, however, Italy undercut the autonomy of the South 
Tiroleans by expanding the autonomous region to include the en- 
tire province of Trentino, the total population of which was two- 
thirds ethnically Italian. The South Tiroleans appealed to Austria 
for assistance. The General Assembly of the United Nations (UN) 



56 



Historical Setting 



adopted a resolution in 1960 instructing Italy and Austria to enter 
into negotiations on the issue. Austria's right to intervene on be- 
half of the South Tiroleans was thus affirmed but brought no results 
until 1969. In the intervening years, South Tirolean activists un- 
dertook a terrorist bombing campaign, which, Italy alleged, Aus- 
tria facilitated through lax border controls. The 1969 agreement 
affirmed South Tirol's autonomous rights, including the use of Ger- 
man as the official language. The International Court of Justice 
in The Hague was given the right to judge disputes over implemen- 
tation of the pact, and Austria waived its rights to intervene. 

Although the OEEC continued to function as a coordinating body 
for European economic integration after the end of the Marshall 
Plan in 1952, six of its members sought closer economic integra- 
tion. In 1957 they formed the European Economic Community 
(EEC — see Glossary). Because Austria's main trading partners, 
the Federal Republic of Germany (West Germany) and Italy, be- 
longed to the EEC, Austria would have liked to join that organi- 
zation. But provisions in the EEC agreement imposed obligations 
in time of war, which were viewed as inconsistent with Austrian 
neutrality. Further, EEC membership also raised questions regard- 
ing unification with Germany, which was forbidden by the State 
Treaty. Austria thus joined six other countries in a looser, strictly 
economic association, the European Free Trade Association (EFT A — 
see Glossary), established in 1960. This was not an entirely sat- 
isfactory solution, and in 1961 Austria sought limited, associated 
membership in the EEC. 

The Soviet Union objected to Austria's association with the EEC 
as a violation of Austria's neutrality. Austria responded that be- 
cause its neutrality was a matter of Austrian law, Austria alone 
had the right to judge what were or were not violations. Nonethe- 
less, Austria proceeded cautiously to avoid needlessly provoking 
the Soviet Union. EEC members also questioned Austria's mem- 
bership. Italy blocked Austria's application to the EEC in 1967 
because of the dispute over South Tirol. French president Charles 
de Gaulle was cool toward Austrian membership, both because of 
his desire to maintain relations with the Soviet Union and because 
of his concern that it might strengthen West Germany's position 
to the detriment of that of France. Austria's persistence, the reso- 
lution of South Tirol's status, and de Gaulle's retirement, however, 
paved the way for an agreement between Austria and the EEC in 
1972 (see Austria and European Integration, ch. 3). 

When Austria adopted a policy of neutrality in 1955, its leaders 
made it clear that political neutrality did not mean moral neutrality. 



57 



Austria: A Country Study 

Austrian sympathies clearly lay with the Western democracies, an 
attitude that was reinforced by its opposition to the Soviet inva- 
sion of Hungary in 1956 and of Czechoslovakia in 1968. Nonethe- 
less, Austria attempted to cultivate good relations with the Soviet 
bloc countries, which accounted for about one-sixth of Austrian 
exports in the mid-1960s. Austria thus benefited when detente eased 
relations between East and West in the late 1960s and early 1970s. 
Austria's efforts to make itself a bridge between East and West — 
an idea the Austrians had proposed as early as 1945 — however, 
remained a largely unfulfilled ambition. 

Elections and Parties 

The outcome of the four parliamentary elections between 1955 
and 1970 hinged on relatively small changes in the division of the 
votes. The OVP consistently held the largest number of seats in 
the Nationalrat and thus leadership of the OVP-SPO coalition, 
the so-called grand coalition, even though in the 1959 election it 
polled fewer votes than the SPO. Prior to the 1966 election, the 
share of the vote received by the OVP fluctuated between 44 and 
46 percent. By achieving an increase to 48 percent in 1966, the 
party was able to win eighty-five parliamentary seats, an absolute 
majority. Julius Raab served as chancellor between 1953 and 1961, 
when he was replaced by Alphons Gorbach. Gorbach brought some 
younger politicians into the party's leadership, where they began 
to press for reforms. One of these younger men, Josef Klaus, 
replaced Gorbach as chancellor in 1964 and headed the OVP 
government between 1966 and 1970. His rise, coming about the 
same time as the deaths of Raab and Figl, marked the passing of 
party leadership to a younger generation that had not experienced 
the trauma of the 1930s. 

The SPO saw its share of the vote fluctuate between 42 and 45 
percent over the course of the four elections. Although the SPO 
held the position of junior partner in the coalition, the electorate 
consistently gave the presidency of the republic to the SPO follow- 
ing reinstitution of direct elections for that post in 1951. Theodor 
Korner, who had succeeded Renner in 1951, died in office prior 
to the 1957 presidential election. Scharf, who had been chairman 
of the SPO since 1945, handily won the 1957 election and was re- 
elected in 1963. When he died in 1965, he was succeeded by the 
Socialist mayor of Vienna, Franz Jonas. 

The VdU was reorganized in 1956 as the Freedom Party of Aus- 
tria (Freiheitliche Partei Osterreichs — FPO). Its share of the vote 
ranged from about 5 percent to 8 percent. The party drew on a 



58 



Historical Setting 



diverse base of voters that included liberals, anticlerical conserva- 
tives, monarchists, and former Nazis. 

The KPO was hurt by its association with the Soviet Union and 
by events in Eastern Europe, particularly the Soviet invasion of 
Hungary. The party's already small share of the vote continued 
to decline, from about 4.5 percent in 1956 to just over 3 percent 
in 1962. After 1959 the KPO held no seats in the Nationalrat. 

Domestic Tranquillity under the Grand Coalition 

The pattern of political cooperation established during the oc- 
cupation years and the economic reconstruction that took place 
through the Marshall Plan laid the foundation for eleven years of 
political tranquillity and economic prosperity. In 1957 the govern- 
ment informally established the Parity Commission for Prices and 
Wages. This commission soon far exceeded its intended function 
of setting prices and wages and effectively established the coun- 
try's basic economic policy. By bringing together the representatives 
of the major economic interest groups — the social partners — and 
requiring unanimous decisions, the commission became a power- 
ful stabilizing force in Austrian society. 

The effort of the SPO to broaden its electoral base helped resolve 
long-standing questions about the status and role of the Roman 
Catholic Church. The party realized that its inheritance of liberal 
anticlericalism and Marxist hostility toward religion stood in the 
way of attracting supporters who were devout Roman Catholics. 
As the SPO moved away from Marxist rhetoric, party leaders be- 
gan to bridge the gulf between the SPO and Roman Catholics. 
In this eased atmosphere, the coalition partners were able to put 
the divisive issue of the 1934 concordat behind them. A new agree- 
ment with the Vatican was signed in 1960. 

The overall effect of the O VP- SPO grand coalition and the so- 
cial partnership represented by the Parity Commission, which 
brought together major economic groups, was to limit parliament's 
power. Most major economic and social decisions were made out- 
side parliamentary channels and simply ratified by the National- 
rat, usually unanimously. Because no major policy differences were 
at stake, elections mainly served to determine the proportion of 
the patronage positions that would be accorded to the coalition part- 
ners. As the country progressed from the trauma of World War 
II and the occupation, members of both major parties began to 
express dissatisfaction with the coalition and the toleration of mis- 
management and abuse of public office that the system appeared 
to condone. In the 1966 electoral campaign, OVP leader Klaus 
called for an end to the grand coalition. After winning an absolute 



59 



Austria: A Country Study 

majority, however, the OVP proposed terms for continuing the 
coalition, which Kreisky and other SPO leaders unsuccessfully urged 
their party to accept. Despite the breakup of the coalition, the Klaus 
government introduced no significant breaks with past policy. The 
OVP's four years in office were thus a coda to the grand coalition 
before the long period of SPO domination under Kreisky began 
in 1970. 

The Kreisky Years, 1970-83 

Electoral Politics in the Kreisky Era 

As the Austrian economy developed in the 1950s and 1960s, the 
nature of the electorate slowly shifted. The declining economic im- 
portance of agriculture and forestry undermined the rural base of 
the OVP. Further, economic growth was occurring primarily in 
the service sector, not in heavy industry or manufacturing, the tradi- 
tional base of the SPO. By 1970 service- sector employees constituted 
just under 40 percent of the working population, and both parties 
sought to position themselves in the middle of the political spectrum 
in order to attract these voters. Under the leadership of Bruno 
Kreisky, the SPO proved more adept at redefining itself in this 
new era. 

Kreisky' s personal popularity played a large part in the success 
of the SPO, and the party capitalized on this by campaigning on 
slogans like "Kreisky — who else?" and "Austria needs Kreisky." 
Although Kreisky came from a wealthy Viennese Jewish family, he 
declared himself an agnostic. Kreisky had been imprisoned in the 
mid- and late 1930s for political activity, but the Nazi regime 
eventually allowed him to emigrate to Sweden, where he became 
acquainted with Swedish socialism and met Willy Brandt, the 
future leader of the German Social Democrats. Kreisky returned 
to Austria after the war and by the early 1950s was working in 
the Ministry for Foreign Affairs and becoming active in party 
politics. 

Kreisky was deeply involved in efforts to broaden SPO appeal 
in the 1950s. As chancellor, he continued to move the party toward 
the political center, reaching out toward swing voters and Roman 
Catholic and rural constituencies. Indicative of SPO reconciliation 
with the mainstream of Austrian culture and history was campaign 
literature in 1979 that featured Kreisky sitting beneath a portrait 
of Emperor Franz Joseph. As the differences between the two major 
political parties lessened, the OVP found it difficult to enunciate 
a distinct political identity because Kreisky so successfully occupied 
the middle ground. 



60 



Historical Setting 



In the election of 1970, the SPO emerged as the largest party 
but lacked a parliamentary majority. An attempt to revive the grand 
coalition failed. And Kreisky could not lure the FPO into a coali- 
tion. But the FPO did agree to cooperate in passing the SPO budget 
in exchange for electoral reform. Kreisky thus formed a minority 
government in 1970, and another election was held under a new 
electoral law in October 1971. 

The electoral reform raised the number of seats in the Nation- 
alrat from 165 to 183 and increased the degree of proportionality 
between a party's percentage of the popular vote and its parliamen- 
tary seats, thus boosting the fortunes of small parties. The SPO 
emerged from the election with an absolute majority, winning a 
bare 50 percent of the vote and ninety-three seats in the enlarged 
Nationalrat. The OVP won only eighty seats and 43 percent of 
the vote. The FPO won 5.5 percent of the vote, the same as in 
1970, and held ten seats. 

The election of 1975 repeated the 1971 results. But in 1979, the 
SPO increased its share of the vote to 5 1 percent and won ninety- 
five seats. The OVP declined to just below 42 percent and won 
only seventy-seven seats. The FPO improved its performance slight- 
ly, getting 6 percent of the vote and taking eleven seats. 

While the electorate had opted for a Socialist chancellor, it also 
continued to elect a Socialist or Socialist-backed presidential can- 
didate throughout the Kreisky era. Six months before the 1970 
parliamentary election, Jonas won reelection, defeating Kurt Wald- 
heim. Jonas died in 1974 and was succeeded by Kreisky's foreign 
minister, Rudolf Kirchschlager. Although he was not a member 
of the SPO, Kirchschlager, a practicing Catholic and a political 
independent, was a Kreisky associate, having been brought into 
Kreisky's cabinet in 1970. His reelection bid was unopposed in 
1980. 

Domestic Issues 

Kreisky's style and tone struck a chord with the Austrian elec- 
torate, and his personal popularity was enhanced by the country's 
economic prosperity in the 1970s. His legislative and economic pro- 
gram was built on the existing political consensus and ratified by 
the social partners. Many measures continued to pass unanimously 
in the Nationalrat. Employee benefits were expanded, the work- 
week was cut to forty hours, and legislation providing for equality 
for women was passed. The period of mandatory military service 
was cut from nine months to six months. Three issues, however, 
divided the country: abortion, nuclear power and environmental 
damage, and ethnic minority rights. 



61 



Austria: A Country Study 

In 1973 the SPO passed a law over the opposition of the OVP 
and the FPO that legalized abortion on demand during the first 
trimester. Popular opposition backed by the Roman Catholic 
Church manifested itself in a petition drive that helped bring the 
issue before parliament again in the spring of 1976. The law, 
however, was upheld. 

In the early 1970s, the international energy crisis triggered by 
the Organization of the Petroleum Exporting Countries (OPEC) 
oil cartel and the Arab oil embargo exposed Austria's vulnerability 
to imported energy supplies. To reduce this vulnerability, Kreisky 
continued the construction of a nuclear power plant at Zwenten- 
dorf, sixty kilometers from Vienna, and planned the construction 
of three other plants. As the Zwentendorf facility neared comple- 
tion in the late 1970s, however, the public expressed growing con- 
cern about the safety of nuclear power. The SPO did not want to 
alienate the environmental movement and its bloc of voters, but 
it also needed to satisfy its trade union constituency, which favored 
the project. The issue was settled by means of a national referen- 
dum on November 5, 1978. Despite Kreisky' s vigorous campaign 
for the plant, the electorate narrowly rejected opening the plant. 

Seeking to implement provisions in the 1955 State Treaty regard- 
ing the rights of the country's Croat and Slovene minority com- 
munities, parliament enacted a law in 1972 to erect dual-language 
signs wherever the minority population of a locality was at least 
20 percent. Such signs were placed in some 200 of the 2,900 towns 
and villages in Carinthia. With the support of local officials and 
police, however, the German- speaking population reacted violently 
and ripped the signs down, reflecting lingering hostility provoked 
by Yugoslav efforts to annex the province after World War II. In 
an effort to resolve the matter, the government took a census in 
1976 to determine Carinthia's ethnic make-up. Because the Slo- 
vene population had declined greatly since 1914, when it account- 
ed for 25 percent of the total populace, Slovene leaders called for 
a boycott of the census, and the results were not considered relia- 
ble. Dual-language signs were erected in 1977 where the local 
minority population was believed to be over 25 percent. 

Foreign Policy 

Under Kreisky' s leadership, Austria sought to play an active role 
in international politics in the 1970s, particularly through the UN. 
Reflecting the acceptance of Austrian neutrality, Waldheim, the 
unsuccessful conservative presidential candidate in 1970, was elected 
UN secretary general in 1971 and reelected to that post in 1976. 
Austria continued to cast itself as a bridge between East and West, 



62 



Historical Setting 



and Vienna was the site for some early rounds of the Strategic Arms 
Limitation Talks (SALT) between the United States and the Soviet 
Union. Kreisky became personally involved in issues relating to 
the Arab-Israeli conflict. Despite general support for maintenance 
of Israeli security, he criticized Israel for its treatment of the Pales- 
tinians. In 1980 Austria gave de facto recognition to the Palestine 
Liberation Organization (PLO) by accepting an accredited agent 
of the PLO in Vienna. Throughout the 1970s, however, Austria 
was also a transit point for Jews leaving the Soviet Union for des- 
tinations in Israel and the West. 

Austria established a more favorable trading relationship with 
the EEC in 1972, but the EEC continued to move toward still fuller 
economic and political integration in Western Europe. Although 
Kreisky pointed to the possibility of Austria's adopting legislation 
on its own in coordination with these developments, he stressed 
that Austria's neutrality would continue to prevent full member- 
ship in the EEC unless it were expanded to include all of Europe. 

End of the Kreisky Era 

During Kreisky 's tenure as chancellor, Austria enjoyed un- 
precedented prosperity, but by the time the April 1983 election 
approached, the SPO had few fresh ideas with which to attract 
critical swing voters. Its image also suffered from various political 
and financial scandals (see Political Developments since 1983, ch. 
4). Its proposal for a tax hike aimed at upper-income Austrians 
to finance job creation was countered by the OVP with promises 
of no new taxes and more careful use of existing government tax 
revenues. Although the OVP failed to unseat the SPO as the larg- 
est party in the Nationalrat, the OVP benefited from a significant 
shift in voter sentiment, and the SPO lost its majority, winning 
ninety seats, which was five seats fewer than in 1979. The OVP 
gained four seats for a total of eighty-one. The FPO won an addi- 
tional seat, for a total of twelve, despite a decline in its share of 
the vote. Two "green" parties, the United Greens of Austria 
(Vereinigte Griine Osterreichs — VGO) and the Alternative List 
of Austria (Alternative Liste Osterreichs — ALO), sought to rally 
voters on environmental issues. Together they took about 3.3 per- 
cent of the vote but won no parliamentary seats. 

Kreisky had campaigned strongly for an absolute majority and 
resigned rather than lead a coalition government. His minister of 
education, Fred Sinowatz, became chancellor in 1983, heading an 
SPO-FPO coalition. Kreisky 's departure marked a major turn- 
ing point in Austria's postwar history, and the Sinowatz govern- 
ment was to be a transitional phase into the contemporary era. 



63 



Austria: A Country Study 

* * * 

Given the scope of Austrian history and Austria's complex rela- 
tionships with the other countries of Central Europe, English- 
language histories of Austria generally focus on particular segments 
of Austrian history rather than on an attempt to give equal atten- 
tion to all centuries. Alexander Wigram Allen Leeper's A History 
of Medieval Austria is a key source for medieval history prior to the 
Habsburgs. The Habsburg Empire, 1790-1918 by Carlile Aylmer 
Macartney is an excellent and inclusive treatment of the late his- 
tory of the Habsburg Empire, although its level of detail and 
thoroughness may be more than the casual reader desires. Robert 
A. Kann's A History of the Habsburg Empire, 1526-1918 is a more 
accessible text, focusing on broader themes rather than on the minu- 
tiae of history. Robert John Weston Evans's The Making of the Habs- 
burg Monarchy, 1550-1700 also takes a thematic approach but covers 
only a portion of the Habsburg centuries. However, it provides 
a useful examination of the intellectual underpinnings of the Habs- 
burg state. 

Barbara Jelavich has written two excellent books covering the 
post-1815 era: The Habsburg Empire in European Affairs, 1814-1918 
and Modern Austria: Empire and Republic, 1815-1986. Their relative 
brevity and conciseness make them excellent overviews. 

The selection of books covering specific topics is growing stead- 
ily. Of particular interest and merit are Samuel R. Williamson, 
Jr . ' 's Austria- Hungary and the Origins of the First World War; Radomir 
Luza's two books, Austro-German Relations in the Anschluss Era and 
The Resistance in Austria, 1938-1945; and Alfred D. Low's The An- 
schluss Movement, 1918-1938. 

For those interested in more current history, Melanie A. Sully's 
A Contemporary History of Austria focuses on the post-Kreisky era. 
(For further information and complete citations, see Bibliography.) 



64 



Chapter 2. The Society and Its Environment 




Coat of arms of the province of Vorarlberg 



AUSTRIA'S SECURITY AND PROSPERITY during the sec- 
ond half of the twentieth century are a striking contrast to the in- 
stability and poverty of the first half of the century. Between 1914 
and 1950, Austrians had five different forms of government and 
four different currencies. After enduring much hardship during 
World War I, they experienced the collapse of Austria-Hungary 
(also seen as the Austro- Hungarian Empire) and the proclamation 
of the Republic of Austria. In the early 1920s, they endured hyperin- 
flation and in the 1930s the Great Depression. The end of Aus- 
tria's fledgling democracy and the establishment of an authoritarian 
regime in 1934 were followed by the demise of Austria altogether 
when Nazi Germany occupied the country in 1938. The procla- 
mation of the Second Republic in 1945 began a long period of peace 
and prosperity. However, the republic's first years were a difficult 
time of economic and social reconstruction that occurred while Aus- 
tria was occupied by the Four Powers (Britain, France, the Soviet 
Union, and the United States). War, inflation, unemployment, 
poverty, authoritarian and totalitarian rule, and foreign occupa- 
tion formed the average Austrian's experience during the first half 
of the twentieth century. 

The new state of Austria that emerged out of the chaos of World 
War I faced such serious structural problems that many of its citizens 
doubted it could survive. Social and economic relationships that 
had evolved over centuries either ended or were greatly altered. 
Moreover, the regions of this small German-speaking "rump state" 
did not join together well to form a new nation. Austria's rural 
areas, populated predominantly by peasant-farmers, were under- 
developed, most notably in the Alpine regions of western and cen- 
tral Austria. They did not mesh well with the large urban and 
industrial centers in eastern Austria, especially Vienna, which had 
evolved to meet the markets and needs of an entire empire, not 
a small state. The virtual absence of an Austrian national identity 
merely aggravated concerns about the state's viability. 

The events of the late 1930s and 1940s proved these concerns 
justified, but by 1955 Austria had regained its independence, laid 
the foundations for decades of sustained economic growth, and 
established a system of cooperation among rival political parties, 
interest groups, and government bodies that brought the country 
an unprecedented degree of stability. Stability did not bar change, 
however, and Austrian society changed greatly as a thriving, 



67 



Austria: A Country Study 



continuously modernizing economy altered the way Austrians 
earned their living and the way they lived. 

The number of Austrians engaged in agriculture and forestry 
fell from more than 60 percent at the end of World War II to 7 
percent by the beginning of the 1990s. More and more Austrians 
came to live in urban areas, and over two-thirds of the country's 
population was concentrated in the valleys and lowlands of eastern 
Austria. The initial industrial growth was followed by a pronounced 
shift to the service sector, and peasant-farmers or blue-collar work- 
ers, who had frequently lived and worked under abject conditions, 
increasingly were replaced by white-collar, service-sector employees. 
By the early 1990s, this sector employed more than 50 percent of 
the labor force in a society that was predominantly middle class. 

The country's population reflects the political and economic trau- 
mas that occurred between 1914 and 1945. Austria has been by 
turns a land of immigration and emigration. After the two world 
wars and during the Cold War, it was a haven for many refugees 
from Eastern Europe. Before and during World War II, however, 
many Austrians fled for racial or political reasons. During the 1960s 
and later, an increasing number of foreigners from southeastern 
and Eastern Europe settled in Austria. Their presence offset to some 
degree the negative growth rate of the country's indigenous popu- 
lation. 

The Austrian family has also changed, both in size and in struc- 
ture. During the last generation, it has became smaller. Traditional 
family values and life-styles are in a state of rapid transition, as 
evidenced by the increasing number of people living alone, child- 
less marriages, and steadily increasing rates of divorce and ille- 
gitimacy. Although Austria is a predominantly Roman Catholic 
country, these changes show that religion no longer plays as im- 
portant a role as in the past. 

Social change has led to a much more open, democratic, socially 
mobile, and prosperous society in which there are few rigid class 
distinctions. Traditionally disadvantaged groups have had greater 
access to secondary and university education. Furthermore, Aus- 
tria has a highly developed welfare state that provides a broad spec- 
trum of social security and health care benefits. As a result, in the 
early 1990s the quality of life in Austria was rated the world's tenth 
best by Washington's Population Crisis Committee. 

Austrians have also developed a new and unprecedented national 
consciousness. For the first time, they have come to see themselves 
as a distinct people separate from their German neighbors. They 
have also found a new European role as a neutral state between 
the East and the West. However, the anticipated and unanticipated 



68 



The Society and Its Environment 



dynamics of West European and East European development — 
European economic and political integration and the opening of 
Eastern Europe — have changed the hopes and expectations Aus- 
trians have entertained, as well as the nature of their fears and 
anxieties. 

Geography 

Austria is a small, predominantly mountainous country located 
in south-central Europe. It has a total area of 83,859 square kilo- 
meters, about twice the size of Switzerland and slightly smaller than 
the state of Maine. The landlocked country shares national bor- 
ders with Switzerland and the tiny principality of Liechtenstein to 
the west (200 kilometers together), Germany (784 kilometers) and 
the Czech Republic and Slovakia (568 kilometers together) to the 
north, Hungary to the east (346 kilometers), and Slovenia (311 
kilometers) and Italy (430 kilometers) to the south. 

The westernmost third of the somewhat pear-shaped country con- 
sists of a narrow corridor between Germany and Italy that is be- 
tween thirty-two and sixty kilometers wide. The rest of Austria lies 
to the east and has a maximum north-south width of 280 kilo- 
meters. The country measures almost 600 kilometers in length, 
extending from Lake Constance on the Austrian-Swiss border in 
the west to the Neusiedler See on the Austrian-Hungarian border 
in the east. The contrast between these two lakes — one in the Alps 
and the other a typical steppe lake on the westernmost fringe of 
the Hungarian Plain — illustrates the diversity of Austria's land- 
scape. 

Seven of Austria's nine provinces have long historical traditions 
predating the establishment of the Republic of Austria in 1918: 
Upper Austria, Lower Austria, Styria, Carinthia, Salzburg, Tirol, 
and Vorarlberg (see fig. 1). The provinces of Burgenland and 
Vienna were established after World War I. Most of Burgenland 
had been part of the Kingdom of Hungary, but it had a predomi- 
nantly German-speaking population and hence became Austrian. 
Administrative and ideological reasons played a role in the estab- 
lishment of Vienna as an independent province. Vienna, histor- 
ically the capital of Lower Austria, was a socialist stronghold, 
whereas Lower Austria was conservative, and both socialists and 
conservatives wanted to consolidate their influence in their respec- 
tive provinces. Each province has a provincial capital with the ex- 
ception of Vienna, which is a province in its own right in addition 
to being the federal capital. In Vienna, the City Council and the 
mayor function as a provincial parliament and provincial gover- 
nor, respectively. 



69 



Austria: A Country Study 

Landform Regions 

The two best-known features of the Austrian landscape are the 
Alps and the Danube River (see fig. 5). The Danube has its source 
in southwestern Germany and flows through Austria before emp- 
tying into the Black Sea. It is the only major European river that 
flows eastward, and its importance as an inland waterway has been 
enhanced by the completion in 1992 of the Rhine-Main-Danube 
Canal in Bavaria, which connects the Rhine and Main rivers with 
the Danube and makes possible barge traffic from the North Sea 
to the Black Sea. 

The major rivers north of the watershed of the Austrian Alps 
(the Inn in Tirol, the Salzach in Salzburg, and the Enns in Styria 
and Upper Austria) are direct tributaries of the Danube and flow 
north into the Danube Valley, whereas the rivers south of the 
watershed in central and eastern Austria (the Gail and Drau rivers 
in Carinthia and the Miirz and Mur rivers in Styria) flow south 
into the drainage system of the Drau, which eventually empties 
into the Danube in Serbia. Consequently, central and eastern Aus- 
tria are geographically oriented away from the watershed of the 
Alps: the provinces of Upper Austria and Lower Austria toward 
the Danube and the provinces of Carinthia and Styria toward the 
Drau. 

The Alps cover 62 percent of the country's total area. Three 
major Alpine ranges — the Northern Alps, Central Alps, and 
Southern Alps — run west to east through Austria. The Central Alps, 
which consist largely of a granite base, are the largest and highest 
ranges in Austria. The Central Alps run from Tirol to approxi- 
mately the Styria- Lower Austria border and include areas that are 
permanentiy glaciated in the Otzal Alps on the Tirolean-Italian 
border and the High Tauern in eastern Tirol and Carinthia. The 
Northern Alps, which run from Vorarlberg through Tirol into Salz- 
burg along the German border and through Upper Austria and 
Lower Austria toward Vienna, and the Southern Alps, on the 
Carinthia-Slovenia border, are predominantly limestone and dolo- 
mite. At 3,797 meters, Grossglockner in Carinthia is the highest 
mountain in Austria. As a general rule, the farther east the North- 
ern Alps and Central Alps run, the lower they become. The alti- 
tude of the mountains also drops north and south of the central 
ranges. 

As a geographic feature, the Alps literally overshadow other land- 
form regions. Just over 28 percent of Austria is moderately hilly 
or flat: the Northern Alpine Foreland, which includes the Danube 
Valley; the lowlands and hilly regions in northeastern and eastern 



70 



The Society and Its Environment 



Austria, which include the Danube Basin; and the rolling hills and 
lowlands of the Southeastern Alpine Foreland. The parts of Aus- 
tria that are most suitable for settlement — that is, arable and cli- 
matically favorable — run north of the Alps through the provinces 
of Upper Austria and Lower Austria in the Danube Valley and 
then curve east and south of the Alps through Lower Austria, Vien- 
na, Burgenland, and Styria. Austria's least mountainous landscape 
is southeast of the low Leitha Range, which forms the southern 
lip of the Viennese Basin, where the steppe of the Hungarian Plain 
begins. The Bohemian Granite Massif, a low mountain range with 
bare and windswept plateaus and a harsh climate, is located north 
of the Danube Valley and covers the remaining 10 percent of Aus- 
tria's area. 

Human Geography 

Land-use patterns in Austria change from Alpine to non-Alpine 
regions. Approximately one-tenth of Austria is barren or unproduc- 
tive, that is, extremely Alpine or above the tree line. Just over two- 
fifths of Austria is covered by forests, the majority of which are 
in Alpine regions. Less than one-fifth of Austria is arable and suit- 
able for conventional agriculture. The percentage of arable land 
in Austria increases in the east as the country becomes less Alpine. 
More than one-fifth of Austria is pastures and meadows located 
at varying altitudes. Almost one-half of this grassland consists of 
high-lying Alpine pastures. 

Historically, high Alpine pastures have been used during the sum- 
mer for grazing dairy cattle, thus making space available at lower 
altitudes for cultivating and harvesting fodder for winter. Many 
of the high pastures are at altitudes of more than 1,000 meters. 

Although agriculture in mountainous areas was at one time eco- 
nomically viable, in recent decades it has survived only with the 
help of extensive subsidies. A concern of farmers in these moun- 
tainous regions is that membership in the European Union (EU — 
see Glossary) might entail a curtailment of these subsidies and the 
end of Alpine agriculture. If this occurs, many areas will be 
reclaimed by nature after centuries of cultivation. 

Although the Alps are beautiful, they make many areas of Aus- 
tria uninhabitable. Austria's so-called areas of permanent settle- 
ment — regions that are cultivated, continuously inhabited, and used 
for transportation, but do not include forests, Alpine pastures, or 
barren land — cover only four-tenths or 35,000 square kilometers 
of the country. The great majority of the area of permanent settle- 
ment is in the Danube Valley and the lowlands or hilly regions 



73 



Austria: A Country Study 

north, east, and south of the Alps, where approximately two-thirds 
of the population live. 

In the country's predominantly Alpine provinces, most of the 
population live in river valleys: Bregenz on the shores of Lake Con- 
stance in Vorarlberg; Innsbruck on the Inn River in Tirol; Salz- 
burg on the Salzach River in Salzburg; and Klagenfurt on the Gail 
River in Carinthia. The higher the Alps are, the less inhabitable 
they become in terms of soil, microclimate, and vegetation. Con- 
versely, the lower and broader the Alpine valleys are, the more 
densely populated they become. 

Tirol illustrates most clearly the relationship between Alpine ge- 
ography and habitation. As the most mountainous province (less 
than 3 percent of the land is arable), it is the most sparsely inhabited, 
with an area of permanent settlement of only 15 percent. 

Because of the Alps, the country as a whole is one of the least 
densely populated states of Western and Central Europe. With 
ninety- three inhabitants per square kilometer, Austria has a popu- 
lation density similar to that of the former Yugoslavia. 

Austria's national borders and geography have corresponded very 
little. Since the fall of the Roman Empire, the Alps and the Danube 
have not served to mark political boundaries. Even within Aus- 
tria, provincial borders were only occasionally set by the ranges 
and ridges of the Alps. 

Although the Alps did not mark political boundaries, they often 
separated groups of people from one another. Because in the past 
the Alps were impassable, inhabitants isolated in valleys or net- 
works of valleys developed distinct regional subcultures. Conse- 
quently, the inhabitants of one valley frequendy maintained dialects, 
native or traditional dress, architectural styles, and folklore that 
substantially differed from those of the next valley. Differences were 
great enough that the origins of outsiders could easily be identi- 
fied. However, mass media, mobility, prosperity, and tourism have 
eroded the distinctness of Alpine regional subcultures to a great 
extent by reducing the isolation that gave them their particular 
character. 

Despite the Alps, Austria has historically been a land of transit. 
The Danube Valley, for centuries Central Europe's aquatic link 
to the Balkan Peninsula and the "Orient" in the broadest sense 
of the word, has always been an avenue of east- west transit. 
However, Europe's division into two opposing economic and mili- 
tary blocs after World War II diminished Austria's importance as 
a place of transit. Since the opening of Eastern Europe in 1989, 
the country has begun to reassume its historical role. By the early 



74 



The Society and Its Environment 



1990s, it had already experienced a substantial increase in the num- 
ber of people and vehicles crossing its eastern frontiers. 

Within the Alps, four passes and the roads that run through them 
are of particular importance for north-south transit. The Semmering 
Pass on the provincial border of Lower Austria and Styria con- 
nects the Viennese Basin with the Miirz and Mur valleys, thus 
providing northeast-southwest access to Styria and Slovenia, and, 
via Carinthia, to Italy. 

The Phryn Pass, between the provinces of Upper Austria and 
Styria, and the Tauern Pass, between the High Tauern Range and 
the Low Tauern Range of the Central Alps in Salzburg, provide 
access to the Mur Valley in Styria and the Drau Valley in Carin- 
thia, respectively. The highways that run through these passes are 
important northwest-southeast lines of communication through the 
Alps. The Phyrn highway has been nicknamed the "foreign work- 
ers' route" because millions of "guest workers" in Germany use 
it to return to their homes in the Balkans and Turkey for vaca- 
tion. Many Germans and northern Europeans also use it in the 
summer months to reach the Adriatic coast. After the outbreak of 
hostilities in Yugoslavia in the summer of 1991, however, a sub- 
stantial amount of this traffic was rerouted through the Danube 
Valley and Hungary. 

The most important pass in the Austrian Alps is the Brenner 
Pass, located on the Austrian-Italian border in Tirol. At 1,370 
meters, it is one of the lowest Alpine passes. The Inn Valley and 
the Brenner Pass historically have been an important and convenient 
route of north-south transit between Germany and Italy, and they 
provide the most direct route between Europe's two most highly 
industrialized regions — Germany and northern Italy. 

Climate 

The Alps serve as a watershed for Europe's three major kinds 
of weather systems that influence Austrian weather. The Atlantic 
maritime climate from the northwest is characterized by low- 
pressure fronts, mild air from the Gulf Stream, and precipitation. 
It has the greatest influence on the northern slopes of the Alps, 
the Northern Alpine Foreland, and the Danube Valley. The con- 
tinental climate is characterized by low-pressure fronts with precipi- 
tation in summer and high-pressure systems with cold and dry air 
in winter. It affects mainly eastern Austria. Mediterranean high- 
pressure systems from the south are characterized by few clouds 
and warm air, and they influence the weather of the southern slopes 
of the Alps and that of the Southeastern Alpine Foreland, making 
them the most temperate part of Austria. 



75 



Austria: A Country Study 

One peculiarity of the Mediterranean weather systems is the fohn, 
a warm air mass that originates in the African Sahara and moves 
north rapidly, periodically raising temperatures up to 10°C in a 
short period of time. Many people respond to this rapid weather 
change with headaches, irritability, and circulatory problems. Dur- 
ing the winter, the rapid warming that accompanies a fohn can 
thaw the snow cover in the Alps to such an extent that avalanches 
occur. 

Given the importance of Alpine skiing for the Austrian tourist 
industry, December is the month during which the weather is 
watched with the greatest anticipation. As a rule, Atlantic mari- 
time weather systems bring snow, and continental weather systems 
help keep it. However, a predominance of cold, dry continental 
systems or warm Mediterranean ones inevitably postpones the be- 
ginning of the ski season. In the summer, Mediterranean high- 
pressure systems bring warm, sunny weather. 

Ecological Concerns 

Austrians face a number of ecological problems in the 1990s. 
One of the most pressing is the pollution caused by the staggering 
increase of traffic through the country. Traffic on the superhigh- 
way going through the Brenner Pass has, for example, increased 
from 600,000 vehicles per year in the early 1970s to over 10 mil- 
lion per year in the early 1990s. One-quarter of the traffic cross- 
ing Austria consists of semitrailers used for heavy transport. The 
opening of Eastern Europe has only exacerbated the problem of 
transit traffic. 

The Alpine valleys through which much of this traffic passes are 
unusually vulnerable to ecological damage. Narrow valleys are not 
conducive to dissipation of noise or pollutants caused by motor ve- 
hicles. Inversions — cold layers of air that trap warm layers of air 
or warm layers of air that trap cold layers in the valleys and 
lowlands — also seasonally contribute to the magnitude of the pol- 
lution problem. 

Austria has negotiated with the EU to set limits on the amount 
of commercial transit traffic, especially through Tirol. Work is also 
under way to develop a "piggy-back" system of loading semitrailers 
on to flatbed railroad cars in southern Germany and northern Ita- 
ly, transporting them through Tirol by rail. Environmentalists have 
pushed for measures that are more far-reaching. They advocate, 
for example, digging a tunnel from Garmisch-Partenkirchen in 
southern Germany to Bolzano in northern Italy. 

Pollution is also brought by the weather systems that determine 
the country's climate. Atlantic maritime weather systems carry 



76 



Church at Gargellan in the 
province of Vorarlberg 
Courtesy Embassy of Austria, 
Washington 




i 



pollution into Austria from northwestern Europe. Austria's prox- 
imity to industrialized regions of former Communist states, with 
negligible or no pollution control policies or equipment, combined 
with the influence of continental weather systems, also has proved 
to be extremely harmful. Mediterranean weather systems trans- 
mit industrial pollutants from northern Italy. 

As a result of domestic and foreign pollution, 37 percent of Aus- 
tria's forests had been damaged by acid rain and/or pollutant emis- 
sions by 1991. The damage to forests has had dire consequences, 
including the decimation of forests that for centuries had protected 
many Alpine communities from avalanches, erosion, mud slides, 
or flooding caused by runoff. 

The seriousness of the ecological problems confronting the coun- 
try gave rise in the 1970s to an environmentalist movement. Po- 
litical parties were formed, and representatives were elected to 
parliament (see The Green Parties, ch. 4). A referendum in 1978 
closed down a newly completed nuclear power plant and turned 
the country away from the exploitation of nuclear energy. Public 
opposition in 1984 stopped the planned construction of a hydro- 
electric power plant in a wetlands region. 

The country's long-standing commercial use of the Alps for 
recreational purposes has also come under examination. Extensive 
tourism places an inordinate amount of pressure on sensitive Al- 
pine ecosystems. Ski runs damage forests, as do summer sports 



77 



Austria: A Country Study 

such as off-trail mountain hiking or mountain biking. Many Al- 
pine villages have also grown greatly because of the tourist indus- 
try. In extreme cases, they have up to twenty hotel beds for each 
inhabitant, a ratio that places a disproportionate seasonal burden 
on communal infrastructures and the environment. For these rea- 
sons, efforts have been made to introduce "green" or "soft" forms 
of tourism that are more compatible with the Alpine environment. 

Part of the solution to Austria's ecological problems is being 
sought in stricter environmental legislation at the domestic level. 
Ultimately, however, pan-European and global cooperation in the 
realm of pollution and emission control will be necessary to pro- 
tect the country's environment. 

Austrian National Identity 

The absence of an Austrian national identity was one of the 
problems confronted when Austria became a country in Novem- 
ber 1918 (see The End of the Habsburg Empire and the Birth of 
the Austrian Republic, ch. 1). Before 1918 there had been no tra- 
dition among German- speaking Austrians of striving for national 
independence as a small German- speaking state separated from 
Austria- Hungary or separated from Germany. Within the context 
of the multiethnic and multilinguistic empire, the great majority 
of the inhabitants of what was to become Austria considered them- 
selves "Germans" insofar as they spoke German and identified 
with German culture. 

Strong provincial identities that stemmed from the provinces' 
histories as distinct political and administrative entities with their 
own traditions existed for this reason. Tiroleans, for example, iden- 
tified more with their province than with the new nation-state. As 
a result, the idea of an "Austrian nation" as a cultural and politi- 
cal entity greater than the sum total of provinces, yet smaller than 
the pan-German idea of the unification of all German speakers into 
one state, virtually did not exist in 1918. The Austrian historian 
Friedrich Heer described the confusion surrounding Austrians' 
national identity in the following manner: "Who were these Aus- 
trians after 1918? Were they Germans in rump Austria, German - 
Austrians, Austrian-Germans, Germans in a 'second German 
state,' or an Austrian nation?" 

Furthermore, Austrians had serious doubts about the economic 
and political viability of a small German-speaking state. Two al- 
ternatives were envisioned for Austria: either membership in a con- 
federation of the states formed out of Austria-Hungary or unification 
with Germany as a legitimate expression of Austrian national self- 
determination. Neither alternative was realized. Efforts to form 



78 



The Society and Its Environment 



a "Danube Confederation" failed, and the Allies prohibited Aus- 
tria's unification with Germany in the treaties signed after World 
War I. As a compromise between these alternatives, Austria was 
a "state which no one wanted." 

After 1918 many Austrians identified themselves as being mem- 
bers of a "German nation" based on shared linguistic, cultural, 
and ethnic characteristics. Since unification with Germany was for- 
bidden, most Austrians regarded their new country as a "second" 
German state arbitrarily created by the victorious powers. During 
the troubled interwar period, unification with a democratic Ger- 
many was seen by many, not only by those on the political right 
but across the entire political spectrum, as a solution for Austria's 
many problems. 

Nazi Germany's annexation (Anschluss) of Austria into the Third 
Reich in March 1938 proved to be an impetus for the development 
of Austrian national consciousness (see The Anschluss and World 
War II, ch. 1). Austrians increasingly focused on the historical and 
cultural differences between Austrian and German traditions — or 
the uniqueness and singularity of an "Austrian nation" — and on 
the idea of an independent Austrian state. It is one of those quirks 
of history that the experience of being "German" in the Third 
Reich was instrumental in awakening feelings of Austrian nation- 
alism for many Austrians, who, by the end of World War II, whole- 
heartedly endorsed the idea of Austrian independence from 
Germany. This idea involved rejecting the concept of one "Ger- 
man linguistic and cultural nation" for the sake of two German- 
speaking nations: one German and the other Austrian. 

The reestablishment of Austrian independence in 1945 set the 
conditions for the development of a new Austrian national identi- 
ty (see Restored Independence under Allied Occupation, ch. 1). 
Allied policy, which formulated the reestablishment of an indepen- 
dent Austrian state as a war objective and distinguished between 
the treatment of Austrians and Germans and the Allied occupa- 
tion of Austria from 1945 until 1955 contributed to promoting at- 
titudes of national cohesiveness and a desire for independence. After 
the State Treaty of 1955 arranged for the end of the Allied occu- 
pation and a subsequent proclamation of Austria's permanent neu- 
trality, Austrians increasingly identified themselves with their 
country and saw it as a state with traditions and a history distinct 
from those of Germany. Although a persistent right-wing minority 
in Austria continued to insist on "Germanness" as being one of 
the attributes of being Austrian, ever more Austrians came to iden- 
tify with the Austrian nation in the decades after World War II. 



79 



Austria: A Country Study 

Seventy-nine percent did so by 1990, compared with 47 percent 
in 1966. In this respect, Austria is a "young nation." 

Demography 

The demographic history of Austria corresponds to the general 
changes that have taken place in other industrial nations, but with 
a number of regional and historical differences. An increasing life 
expectancy, a declining fertility rate (or a lower birth rate), and 
a greater concentration of population in urban areas are trends Aus- 
tria shares with other advanced industrial nations. The cataclys- 
mic events of World War I and World War II, the substantial 
population movements — both forced and voluntary — during the 
interwar period and after World War II, the influx of foreign 
workers starting in the 1960s, and the opening of Eastern Europe 
beginning in the late 1980s all affected the size and structure of 
Austria's population. 

Demographic Development 

Between 1900 and 1991, the country's population grew from 
6,004,000 to 7,795,800 (see table 2, Appendix). War deaths and 
birth deficits during each of the world wars and the consequences 
of the Great Depression profoundly influenced the development 
of Austria's population. Approximately 190,000 men were killed 
in action in World War I. Increased mortality among the civilian 
population as a result of the hardships of war and the immediate 
postwar period and extremely low birth rates resulted in a popula- 
tion decrease of 100,000 between the censuses of 1910 and 1923. 
Postwar immigration of German- speaking and Jewish populations 
from the successor states of Austria-Hungary to the Republic of 
Austria and emigration from Austria after the war basically offset 
each other. Economic and political crises in the first half of the 1930s 
caused 72,000 Austrians to emigrate to non-European countries. 
The largest contingent of emigrants, 37,000, were from the province 
of Burgenland and went primarily to the United States, mainly 
for economic reasons. 

After Austria was annexed by Nazi Germany in March 1938, 
an estimated 130,000 Austrians, the great majority of whom had 
Jewish origins, emigrated from Austria. More than 65,000 Aus- 
trian Jews died in the concentration camps and prisons of the Third 
Reich; 35,000 non-Jewish Austrians shared a similar fate or were 
executed after trials. An estimated 250,000 Austrians were killed 
in action during World War II; 25,000 civilians were killed as a 
result of bombing or military action in Austria. Some of these losses 



80 



The Society and Its Environment 



were offset by Nazi population policies that promoted motherhood 
and large families for racial reasons. 

After the war, Austria became a destination for ethnic Germans, 
who fled from or were driven out of their homes in Czechoslova- 
kia, Romania, and Yugoslavia. Other refugees and "displaced per- 
sons," who were either uprooted by hostilities or victims of the 
expulsions sanctioned by the Allies and carried out by East Euro- 
pean governments immediately after the war, also came to Aus- 
tria. Between 1945 and 1950, about 400,000 immigrants — ethnic 
Germans from Eastern Europe and other non-German speaking 
refugees — settled in Austria and eventually became Austrian 
citizens. 

The increase of birth rates in Austria during the 1950s cor- 
responded with the trends in most other West European countries. 
Between 1950 and 1992, the infant mortality rate in Austria dropped 
from over 61.3 per 1,000 live births to 7.5 per 1,000, an indica- 
tion of improvements Austrian health authorities had made in 
prenatal and postnatal care. During the 1960s, Austria experienced 
an unprecedented population growth related to an increase of births 
over deaths and a large influx of foreign workers. After the mid- 
1960s, however, there was a substantial and continuous drop in 
the fertility and birth rates in Austria, generally referred to as the 
"pill drop-off." In 1974 this trend was further influenced by the 
legalization of abortion during the first trimester of pregnancy. Since 
the mid-1970s, Austria — after Italy and the Federal Republic of 
Germany (West Germany) — has had the third lowest fertility rate 
in the world: 1 .44 children per woman in 1990, a rate substantially 
lower than the replacement rate of 2.09. 

In the early 1980s, some demographers predicted that the popu- 
lation of Austria would decline from 7.5 million to its 1965 level 
of 7.25 million by 2010. This scenario was substantially revised 
when in the mid-1980s Austria's population experienced a spurt 
of dramatic growth. Projections in 1990 anticipated a net growth 
of Austria's population by 500,000 to 8 million by 2010. An in- 
crease in immigration and the higher fertility rate of foreign work- 
ers accounted for the greatest part of Austria's net population growth 
in the early 1990s. 

Within Austria there are substantial variations in regional pat- 
terns of population growth among the indigenous population, in 
contrast to the immigrant or foreign population. After World War 
II, Austria's eastern provinces — Lower Austria, Vienna, and 
Burgenland — had lower rates of fertility than the other provinces 
in the country. Throughout the 1960s and the 1970s, there was 
a clear "east-west watershed" in population growth. The west had 



81 



Austria: A Country Study 



AGE-GROUP 



95 and over 






























90-94 














I 
















85-89 






























80-84 






( 


/IALE 


5 




























m 


FEMALES 


75-79 






























70-74 
















: 




mm 










65-69 






























60-64 
















mm 














55-59 






























50-54 
















msd 














45-49 


















" - 








I 




40-44 


















mil 


■ ■ ■■ 










35-39 
















..... .. . 


- - — 












30-34 


















































:! ■ 








MM 


20-24 


















- ■■■■■ - 










I 


15-19 






























10-14 




















MM* 










5-9 






























0-4 


















Bill 






I 





































350 300 250 200 150 100 50 50 100 150 200 250 300 350 



POPULATION IN THOUSANDS 



Source: Based on information from Austria, Osterreichisches Statistisches Zentralamt, 
Statistisches Handbuch fur die Republik Osterreich, 1991, Vienna, 1991, 24. 

Figure 6. Population by Age and Gender, 1990 

higher rates of fertility, while the east's lower rates of fertility led 
to a stagnating or declining population (see table 3, Appendix). 
The economic and social reasons for these patterns of development 
were complex and included the Soviet occupation of eastern Aus- 
tria from 1945 to 1955 and the depopulation of regions along the 
Iron Curtain, the traditionally weak economic infrastructure of 
predominantly rural areas in eastern and southeastern Austria, and 
the conservatism and deeply rooted Roman Catholicism of western 
Austria. 

In 1970 the average life expectancy was seventy years (sixty for 
males and seventy- three for females). By 1990 the average life ex- 
pectancy was almost seventy-six years (seventy-two for males and 
seventy-nine for females). The increasing life expectancy and the fall 



82 



The Society and Its Environment 



in the number of births have meant that Austria's population is 
aging (see fig. 6; fig. 7). One of the major concerns under these 
circumstances is the burden placed on the Austrian social security 
system: to what extent will a constant, or shrinking, labor force 
be able to maintain an increasing number of pensioners? 

The overall decline of fertility among Austria's indigenous popu- 
lation is similar to developments in other advanced industrial na- 
tions in Europe. The decline is caused by a complex set of factors, 
including the increased use of contraception and abortion, and the 
increased employment of women outside the home, and changing 
values and attitudes toward marriage, family, and childbearing. 

Immigration 

Austria's position in Central Europe after World War II — by 
1948 about 1,225 kilometers, or 46 percent, of its frontiers were 
with communist states — and the proclamation of Austrian neutrality 
in October 1955 made Austria Europe's most important country 
of east- west transit, transmigration, and the claiming of refugee 
status. Between 1945 and 1990, approximately 2.6 million people 
came to Austria as immigrants, transmigrants, or refugees. The 
great majority of them stayed in Austria only for short periods, 
and some 550,000 used Austria exclusively as a land of transit. Ap- 
proximately 1.4 million people were transmigrants who lived in 
Austria before emigrating to other countries or returning to their 
countries of origin. About 650,000 people, over half of whom were 
not ethnic Germans or native German speakers, settled permanently 
in Austria, the great majority of whom became citizens. 

Although Austrians traditionally viewed their country as a neu- 
tral land of transit and political asylum, they did not see Austria 
as a land of immigration like the United States, Canada, or Aus- 
tralia. This perception, however, does not correspond to the fact 
that more than 10 percent of the country's citizens in 1990 had 
not been born in Austria and that in the early 1990s more than 
500,000 legal foreigners, predominantly guest workers, lived in the 
country. 

Waves of immigration were caused by political events in neigh- 
boring countries. After the Hungarian Revolution of 1956, for ex- 
ample, over 250,000 Hungarians fled to Austria, 180,000 of whom 
eventually applied for asylum. In August 1968, after the Warsaw 
Pact invasion of Czechoslovakia ended the "Prague Spring," 
162,000 Czechs and Slovaks fled to Austria. Although the majority 
of them eventually returned to Czechoslovakia, 12,000 applied for 
asylum. In Poland the banning of the Solidarity Movement in De- 
cember 1981 caused between 120,000 and 150,000 Poles to go to 



83 



Austria: A Country Study 



AGE-GROUP 



95 and over 
















1 














90-94 














| 


i 














85-89 


















s 












80-84 






MALE 


S 












i 




FEM 


ALES 




75-79 






























70-74 


















— 






_J 






65-69 






























60-64 























































55-59 




















— 








50-54 




















— — 









____ 


45-49 




















-— 










40-44 




















— 


_____ 








35-39 





















, 


______ 

— : 








30-34 






























25-29 































20-24 




















______ 





_____ 




























15-19 



















































10-14 






















! 








5-9 
















































0-4 





























































350 300 250 200 150 100 50 50 100 150 200 250 300 350 



POPULATION IN THOUSANDS 



Source: Based on information from Austria, Osterreichisches Statistisches Zentralamt, 
Statistisches Handbuchfiir die Republik Osterreich, 1991, Vienna, 1991, 24. 

Figure 7. Population by Age and Gender, Projected 2020 

Austria, and 33,000 of them applied for asylum. The opening of 
Hungary's borders during the summer of 1989 breached the Iron 
Curtain, and 40,000 East Germans used Austria as a land of tran- 
sit to emigrate to West Germany. 

In addition to European immigrants, since 1972 Austria has ac- 
cepted contingents of asylum seekers from a number of countries — 
Chile, Argentina, Uganda, Iran, and Afghanistan — under the aus- 
pices of international agreements. Austria was also the main land 
of transit for 250,000 Jewish emigrants from the Soviet Union 
beginning in 1976 until the advent of direct Soviet immigration 
to Israel in 1990. 

The number of individuals seeking political asylum in Austria 
rose from fewer than 5,000 in 1982 to more than 27,000 in 1991 . 



84 



The Society and Its Environment 



Before the Iron Curtain fell at the end of 1989, the granting of po- 
litical asylum in Austria to refugees was relatively liberal. Once 
democratic governments were established in the former communist 
states of Eastern Europe and borders were opened, however, Aus- 
tria began to pursue a more restrictive asylum policy. A distinc- 
tion came to be made between political refugees and so-called 
economic refugees, who sought more lucrative employment or better 
living conditions. As a result, the number of those seeking asylum 
fell to 16,200 in 1992. 

The number of people seeking to immigrate to Austria had in- 
creased so greatly by the early 1990s that the nation's army, the 
Bundesheer (Federal Army), was called in to assist customs and 
border authorities in patrolling the country's borders. After the 
fall of communism, these borders were virtually open for a time. 
By 1992 as many as 100,000 illegal immigrants were in Austria. 
In addition, for humanitarian reasons, Austria had accepted well 
over 50,000 refugees from the former Yugoslavia, who had either 
fled or were expelled from their homes in the course of hostilities 
that began in 1991. Most of these refugees were Bosnians. 

The presence of a large number of foreign workers in Austria 
also affected population trends. The size of this group fluctuated 
according to the state of the country's economy. From the mid-1960s 
through the early 1970s, a period of rapid domestic economic 
growth, Austria's domestic labor force was not large enough to satis- 
fy the demands of its growing economy, and foreign workers were 
brought in to meet the labor shortage. Most were unskilled Yu- 
goslavs and Turks who assumed menial jobs with low salaries. As 
a result of this influx, the number of foreign workers in Austria 
increased from fewer than 50,000 in 1965 to some 220,000 in 1974. 
The recession of the second half of the 1970s and early 1980s had 
reduced their number to 140,000 by 1984. Periods of growth later 
in the decade raised it to 264,000 by 1991. 

Despite these fluctuations, guest workers and their dependents 
had become a permanent feature of Austria's population and ac- 
counted for 80 percent of the 550,000 legally registered foreign in- 
habitants in Austria in 1991. The remaining 20 percent consisted 
of asylum seekers and refugees who had fled from the conflict in 
the former Yugoslavia. 

A shrinking population caused by lower birth rates was Austria's 
greatest demographic concern in the 1970s and early 1980s. 
Although the low birth rate among Austria's indigenous German- 
speaking population continues to be an issue, many Austrians are 
also concerned about the growing number of foreigners in Austria. 
To offset the low birth rate, Austria needs a projected net annual 



85 



Austria: A Country Study 



growth of approximately 25,000 people per year in order to main- 
tain population at a stable level. Most of this growth will come from 
foreigners living in Austria or from immigrants. 

Emigration 

In the early 1990s, the number of Austrians living and working 
abroad — approximately 430,000 — was somewhat lower than the 
number of foreigners in Austria. Since the 1950s, West Germany 
had been the most frequent destination, and in 1990 about 181 ,000 
Austrians resided there, attracted by prospects of better wages and 
greater career opportunities. In the same year, 29,000 Austrians 
lived in Switzerland and 10,000 in Italy. The great majority of the 
remainder lived outside Europe, predominantly in North Ameri- 
ca and South America. In contrast to foreign workers in Austria, 
Austrians working abroad frequently were highly skilled and well 
educated. 

Social Minorities 

The ethnic or national backgrounds of many Austrians reflect 
the multinational heritage of the Habsburg Empire. During the 
late nineteenth and early twentieth centuries, a substantial amount 
of migration occurred within Austria-Hungary to the German- 
speaking provinces of Austria. Austria's western and Alpine 
provinces were affected much less by migration because their low 
levels of industrialization and urbanization offered few employment 
opportunities. Before 1918 Czech and Jewish migration influenced 
the composition of Austria's population to the greatest extent, 
although all the empire's peoples participated in it. The migrants 
to Austria from other parts of the empire were usually assimilated 
into German-speaking Austrian society in a generation or two. 
However, traditional religious prejudices and racist doctrines of 
the late nineteenth century prevented a full acceptance of Jewish 
migrants. 

The post-World War I peace conferences that established the 
borders of the Republic of Austria created a relatively homogene- 
ous German-speaking state (95.3 percent of the populace) but left 
German-speaking minorities in Czechoslovakia and Italy. Although 
the 3 million German-speaking inhabitants of the borderlands of 
Bohemia and Moravia had been subjects of the Habsburgs for 
centuries, their national orientation was German, and it would 
not be accurate to see them as an Austrian minority outside of 
Austria. 

The establishment of the Austrian-Italian frontier at the Bren- 
ner Pass involved the dismemberment of the province of Tirol and 



86 



The Society and Its Environment 



created an Austrian — or, more specifically, German-speaking 
Tirolean — minority of 200,000 persons in South Tirol that was in- 
corporated into the Italian region of Trentino-Alto Adige. While 
Italy was controlled by the Fascists (1922-45), German-speaking 
South Tiroleans were subjected to Italianization campaigns, and 
during World War II they were given the "option" of Italianiza- 
tion or emigration as "settiers" to areas occupied by Nazi Germany. 

After World War II, a popular movement in South Tirol agi- 
tated for the region to be incorporated into Austria, but the Allies 
did not support these aspirations. An agreement in 1947 between 
Italy and Austria provided South Tiroleans with a special autono- 
mous status. The realization of this status became a continuing 
point of contention that sometimes erupted into violence between 
South Tiroleans and Italians and caused friction between Vienna 
and Rome. However, in 1992 political representatives of the 
German-speaking South Tiroleans and the Italian authorities in 
Rome succeeded in drafting legislation that is likely to satisfy South 
Tirolean claims for autonomy as an Italian province (see Region- 
al Issues, ch. 4). 

Official Minority Groups 

Within Austria a distinction is made between "official ethnic 
groups" — Slovenes, Croats, Hungarians, and Czechs and Slovaks — 
who are legally defined and recognized as minorities, and other 
social groups, such as Roma and Sinti (commonly known as Gyp- 
sies), Jews, and foreign workers. These other groups do not have 
a special legal status as "Austrian ethnic groups" but are de facto 
minorities. 

Although Austria was the most homogeneous of the successor 
states carved out of Austria-Hungary, it had a number of indigenous 
ethnic and linguistic minorities in the southern and eastern rural 
borderlands: Slovenes in Carinthia; Croats, Slovaks, and Hungar- 
ians in Burgenland. An urban minority of Czechs and Slovaks were 
also concentrated predominantly in Vienna. These groups account- 
ed for 4.7 percent of Austria's population after World War I. 

The Croats represented the largest single official minority in 
Austria. The Croat enclaves in Burgenland were the result of the 
Habsburgs' wars with the Ottoman Empire in the sixteenth and 
seventeenth centuries. The Croats fled north to avoid Turkish sub- 
jugation, and after the Habsburgs defeated the Turks, Croats were 
settled in Burgenland to compensate for the depopulation the wars 
had caused. 

The drafting of the post-World War I frontiers of Burgenland 
also created Austria's smallest minority. Areas east of the Leitha 



87 



Austria: A Country Study 

River historically had been part of the Kingdom of Hungary, although 
they were predominantly inhabited by German speakers by 1918. 
Negotiations of the national frontiers between Austria and Hungary 
led to Burgenland's becoming a province within Austria. Thus, the 
province's Hungarian population became an Austrian minority. 

The Slovenes of southern Carinthia, Austria's second largest eth- 
nic group, were the descendants of the ancient Slavic population 
that initially inhabited the southern slopes of the Alps and the Drau 
River Basin. Beginning in the early Middle Ages, these Slavs were 
displaced by German speakers. After both World War I and World 
War II, the newly formed state of Yugoslavia had aspirations of 
incorporating into it the areas of southern Carinthia inhabited by 
Slovenes. A Yugoslav invasion of Carinthia in 1918 was followed 
by a plebiscite in the areas in question in 1920 that resolved ter- 
ritorial claims with a clear vote for Austria. Tensions between the 
Slovene minority and the German- speaking majority in Carinthia 
increased during World War II because of Nazi racial policies and 
the military actions in southern Carinthia of Slovene partisans oper- 
ating under the directions of Marshal Josip Broz Tito's National 
Liberation Army. 

After World War II, neither the Allies nor the Austrian authori- 
ties were willing to meet renewed Yugoslav demands to redraw 
the Austrian- Yugoslav border. A partial response to Yugoslav de- 
mands was Article 8 of the State Treaty of 1955, which granted 
official minority status to the Slovenes in Carinthia and the Croats 
in Burgenland. Relations between the Slovenes and the German 
speakers of Carinthia remained strained in the following decades, 
more than was the case anywhere else in Austria. One reason for 
this hostility was the persistence of right-wing and German nation- 
alist attitudes among sections of the German- speaking population. 

The Croats and Hungarians of Burgenland and the Slovenes of 
Carinthia were usually peasant-farmers located in peripheral 
regions. The Czechs and Slovaks who still spoke their native lan- 
guages as first languages presented a stark contrast to these groups. 
This minority descended mainly from migrants who left predomi- 
nantly rural areas of southern Bohemia, Moravia, and Slovakia 
in the late nineteenth and early twentieth centuries to settle in in- 
dustrial centers such as Vienna, Graz, Linz, and Steyr, and in areas 
in northern Styria. There were so many Czech migrants in Vienna 
that the imperial capital was said to be the "second largest Czech 
city" after Prague. In these urban and industrial settings, im- 
migrants were soon assimilated. 

Austrian censuses use the criterion "language of everyday com- 
munication" to determine who belongs to one of the official ethnic 



88 



Street in Trausdorf an der Wulka in the province of Burgenland 
Courtesy Embassy of Austria, Washington 

groups. The Ethnic Groups Law of 1976 sought to protect and pro- 
mote the distinct identities of officially recognized minorities and 
arranged for bilingual education in their languages. Despite such 
measures, however, all of Austria's officially recognized minority 
groups have declined markedly in size. Between 1910 and 1980, 
the number of Croats and Hungarians who declared themselves 
as members of their respective ethnic groups dropped by 50 per- 
cent, the number of Slovenes by 75 percent, and the number of 
Czechs and Slovaks by 95 percent (see table 4, Appendix). 

The decline of indigenous minority groups in Austria stemmed 
from a variety of causes. Part of the decline resulted from pressure 
to assimilate to German-speaking Austrian culture before and 
after World War II, as well as from Nazi racial policies in Aus- 
tria, which distinguished between "superior" and "inferior" races. 
Assimilation, however, was also caused by the modernization of 
Austria after World War II through an increase in economic and 
social mobility that drew younger generations away from traditional 
ethnic and linguistic enclaves, life-styles, and identities. 

Other Minorities 

Austria contains other minority groups that are not defined as such 
by law but are perceived as minorities by the general population: 



89 



Austria: A Country Study 

Gypsies, Jews, and foreign workers. Gypsies and Jews have been 
in Austria for centuries, although a sizable number of Jews came 
to Vienna during the nineteenth century from other parts of the 
Habsburg Empire. The presence of a large number of foreign work- 
ers dates from the 1960s. 

Gypsies 

Roma and Sinti, or Gypsies as they are generally called, arrived 
in Austria in the fourteenth century. An eastern, nomadic people, 
originally from India, they wore colorful clothes, had their own 
language and customs, and exchanged goods for survival. Men 
usually either made pots and other brass objects or were musicians, 
while women told fortunes or sold handmade goods and fruits from 
their wagons. 

A Gypsy's life centered on the family and the larger group, with 
individual achievement playing an insignificant role. Marriage with 
a non-Gypsy typically meant exclusion by the community. Disap- 
proval or punishment by the community was a much more seri- 
ous reprimand to a Gypsy than any legal action by the state. 

The attitude of Gypsies toward work and saving differed from 
that of the majority group in that they generally aimed at earning 
enough to meet "the needs of the day. ' ' When food or money were 
needed, the Gypsy code permitted as a last resort stealing from 
wealthier people. Preferring to feel free and unhindered, Gypsies 
attached littie importance to the accumulation of property, choos- 
ing instead a life of wandering and bartering. Only later during 
their time in Austria did they build semipermanent dwellings. Even 
so, Gypsies preferred to live among themselves on the outskirts of 
towns and cities. 

Because of these habits and attitudes, Gypsies were mistrusted 
by the Austrian population. Gypsies were seen as lazy, disorderly, 
and dirty, and regarded as thieves, criminals, and prostitutes. In 
the eighteenth century, laws were enacted that banned their migrant 
way of life and established "colonies" for them. 

By the late 1930s, an estimated 11,000 Gypsies lived in Aus- 
tria, predominantly in the province of Burgenland. Because of Nazi 
racial doctrines, more than half of them were deported to concen- 
tration camps during World War II. By the war's end, only an 
estimated 4,500 Austrian Gypsies survived. 

At the beginning of the 1990s, as many as 40,000 Gypsies lived 
in Austria, mostly centered in the provinces of Vienna and Bur- 
genland. Although they more often speak German than the tradi- 
tional Romany or Sinti languages, they are by no means assimilated 
into the larger society. Many Gypsies attend Austrian schools, but 



90 



The Society and Its Environment 



their academic performance is below average, and they see schooling 
as a hindrance to freedom. Young men who have completed ap- 
prenticeships are described by their employers as hard-working and 
honest. They generally do not become long-term employees, 
however, particularly if they are living away from their families. 
Young women usually work in factories or as kitchen help. 

Jews 

Jews have also lived in Austria for centuries, at times enduring 
hostility and repression. At other times, the Jewish community has 
flourished and enjoyed a high degree of tolerance. Joseph II (r. 
1780-90) lifted restrictions that had barred them from particular 
trades and education, and despite widespread prejudice against 
them, Jews achieved positions of eminence in business, the profes- 
sions, and the arts in the nineteenth and early twentieth centuries. 
The Jewish community in Austria expanded greatly in the second 
half of the nineteenth century when Jews from other parts of the 
empire came to settle there, mostly in Vienna. Most of these so- 
called Eastern Jews came from the province of Galicia, an area 
located in southern present-day Poland and in western present-day 
Ukraine. The province contained about two-thirds of the Habs- 
burg Empire's Jewish population. 

After the Anschluss, the Nazis systematically applied their ra- 
cial policies to the country's Jews. Approximately 100,000 Austri- 
an Jews managed to emigrate from Austria before World War II 
began, but more than 65,000 Jews died in concentration camps 
and prisons of the Third Reich. As a result, Austrian Jewry was 
virtually annihilated. After World War II, few surviving members 
of Austria's Jewish community returned to Austria, and Austrian 
authorities made no concerted official efforts to repatriate them. 

As of 1990, only a little more than 7,000 Jews were registered 
with the Jewish Orthodox Religious Community in Vienna. This 
figure included recent Jewish immigrants from the Soviet Union 
and Eastern Europe but excluded Jews who did not declare their 
religious affiliation. Because the only statistical information on the 
number of Jews in Austria is available on a confessional basis, ac- 
curate figures on the number of Austrians with Jewish backgrounds 
are not available. It is generally assumed that this group is larger 
than the officially registered one. 

Foreign Workers 

Foreign workers represent the largest de facto minority in Aus- 
tria, although they frequently are not perceived as such because 
they are "foreigners" and "guest workers." Their cultural and 



91 



Austria: A Country Study 

linguistic characteristics set them off from the indigenous popula- 
tion, however, and make them a distinct minority. Present in sub- 
stantial numbers since the 1960s, foreign workers have become a 
permanent feature of Austrian society. 

Initially, many guest workers came to Austria without their fami- 
lies and eventually returned to their countries of origin after having 
saved some money. In this respect, they were similar to "seasonal' ' 
laborers. However, the "rotation" of foreign workers — the return 
of some to their countries of origin offset by the influx of others 
to take their jobs — was gradually replaced by the permanent set- 
tlement of foreign workers and their families. 

Foreign workers who had the required residence visa and work 
permit were entitled to reside permanently in Austria; their docu- 
ments were generally renewed. In addition, once foreigners had 
worked and lived continuously in the country for ten years, they 
could apply for Austrian citizenship. (Under other conditions, such 
as political asylum, the waiting period for application could be 
reduced to four years.) Between 1970 and 1990, over 133,000 
foreigners became naturalized Austrian citizens, the majority of 
whom were long-term foreign workers. 

The Employment of Foreigners Law passed in 1991 limited the 
number of foreign workers who could be employed in Austria to 
10 percent of the domestic labor force. The Resident Alien Law 
of 1993 reduced the number of foreign workers, that is, workers 
from outside the EU and the European Free Trade Association 
(EFTA — see Glossary) still further — to 9 percent of the total work 
force of about 3.5 million. As a result of these laws, approximately 
300,000 foreigners can work in Austria. Because many of these 
workers have dependents, Austrian officials assume foreigners could 
come to constitute approximately 10 percent of the total population. 

Citizens from the former Yugoslavia, predominantly Serbs, ac- 
count for approximately 50 percent of the foreign workers in Aus- 
tria. Turks are the second largest group, making up approximately 
20 percent of the foreign work force, followed by Germans at 5 
percent. Poles, Czechs, Slovaks, Hungarians, and Romanians make 
up between 3.5 and 4.0 percent each. 

Foreigners usually live in urban and industrial centers, most nota- 
bly Vienna. Although foreigners accounted for just over 6 percent 
of the total population in 1990, the foreign population of Vienna 
increased from 7.4 percent in 1981 to 13.2 percent in 1990. Be- 
cause of the large number of foreigners living in the capital and 
the low birth rates of indigenous Austrians, at the beginning of 
the 1990s one-fourth of the children born in Vienna were foreigners. 



92 



The Society and Its Environment 



Despite their essential contribution to the economy and the fact 
that they are more law-abiding than the indigenous population, 
foreign workers are generally not held in high esteem. This prejudice 
is caused by the low pay and social status of their jobs, their lower 
level of education, and an often limited ability to speak German. 
Tensions also arise because of their foreign appearance and cus- 
toms. Some resentment also stems from the social costs their 
presence entails. For example, the children of these workers are 
an additional burden for schools, and there are concerns about how 
well these children are being educated. Determining the national 
identities of these children is often difficult because they are not 
familiar with their parents' homeland yet have the status of 
"foreigners" in Austria. 

The degree or quality of assimilation into the larger society is 
the most serious problem presented by long-term foreign workers. 
It is not known whether they will remain a minority or gradually 
come to be seen as Austrian. Generally speaking, workers from 
the former Yugoslavia show a greater facility for integration or will- 
ingness to assimilate — especially in the second generation — than 
Turks, whose Islamic beliefs tend to make integration more difficult. 

Although the arrival of these foreign workers has promoted the 
upward mobility of Austria's indigenous lower classes by filling 
the jobs having the lowest pay and social prestige, a new ethnic 
lower class has been created. The future social mobility and in- 
tegration of foreign workers will determine to what extent Austria 
will have an "imported" racial problem in the future. 

Attitudes Toward Minorities 

Although Austria had a negligible Jewish population by the early 
1990s, anti-Semitism remains a prejudice among some segments 
of the population. Social scientists disagree about the reliability of 
surveys taken during the 1980s, but the consensus among specialists 
is that between 7 and 12 percent of the population of Austria holds 
consistently anti-Semitic attitudes and can be considered "hard- 
core" anti-Semites. Around 25 percent of the populace is mildly 
anti-Semitic, and approximately 60 percent is neutral or philo- 
Semitic. Surveys also reveal that anti-Semitic sentiments are more 
pronounced among older Austrians than younger ones, increase 
as one moves from the left to the right of the political spectrum, 
and tend to be more pronounced in rural areas. 

Surveys also reveal that there was a decline of explicitly anti- 
Semitic sentiments among some sections of the Austrian popula- 
tion during the 1980s. The decline could derive from the worldwide 
controversy surrounding the nomination and election of Kurt 



93 



Austria: A Country Study 

Waldheim as Austrian president in 1986 and the public discussions 
of the fiftieth anniversary of the Nazi Anschluss in 1988. Both events 
caused a critical reevaluation of the role of Austrians in the Third 
Reich, as well as an open debate about Austrian anti-Semitism. 

The opening of Eastern Europe beginning in 1989 and increased 
immigration to Austria were events that also influenced the struc- 
ture of Austrian attitudes, anxieties, and prejudices. The special 
status Austria enjoyed as a neutral state between the two power 
blocs gave Austrians a sense of security that disappeared after 1989. 
It was replaced by the widespread concern in the early 1990s that 
Austria would be overwhelmed by foreigners as a result of open 
borders. For example, a survey in 1992 found that 38 percent of 
those polled believed that the greatest threat facing Austria was 
its being overrun by eastern refugees. The weakest social groups 
in Austria, the elderly and the retired, and low-income groups — 
who had the impression that they were competing with foreign 
workers — tended to feel most threatened by the changes that ac- 
companied Austria's new position in Europe. 

The role of immigration became a very sensitive political issue 
because of the erroneous but common perception that legal im- 
migrants and foreign workers are a burden instead of a demographic 
and economic benefit. The influx of illegal or "economic refugees" 
from the former communist states of Eastern Europe exacerbated 
the situation. An increase in crime stemming from illegal refugees 
who entered Austria as "tourists" led to increasingly hostile atti- 
tudes toward all foreigners from Eastern Europe, the Balkan Penin- 
sula, and Turkey and the propagation of negative stereotypes. The 
results of a Gallup poll taken in the fall of 1991 showed strong 
xenophobic sentiments toward Gypsies, Serbs, Turks, Poles, and 
Romanians that considerably surpassed anti-Semitic attitudes in 
Austria. The manner in which Austrians learn to cope with im- 
migration and integration will likely play an important role in 
domestic politics in the future. 

Social Structure 

Austrian society was traditionally stratified and had a low degree 
of social mobility. As a result, social distinctions were clear. Social 
relations between aristocrats and commoners, masters and servants, 
large landowners and peasant-farmers, and employers and em- 
ployees were hierarchical and well defined, and the use of titles 
as a reflection of rank or social status was important. Austrians 
born into specific social groups or classes had few opportunities 
to improve their social and economic standing and identified them- 
selves strongly with their inherited social positions, which were 



94 



The Society and Its Environment 



reinforced by education (or the lack thereof), attitudes toward 
religion, and political convictions. 

At the beginning of the nineteenth century, the three predomi- 
nant social classes in Austria were aristocrats; "citizens" or bur- 
ghers in towns and cities, who had special charters of rights and 
privileges; and peasant-farmers — "free farmers" in western Aus- 
tria who owned and tilled their own land and peasant-serfs in eastern 
Austria. Reforms had been introduced during the last decades of 
the eighteenth century to bring about a greater degree of social 
equality, but legal equality was not established in the Austrian half 
of Austria-Hungary until the constitution of 1867 was promulgated. 
Even at the beginning of the twentieth century, society still con- 
sisted of a very small upper class composed of an old aristocracy 
of "blue bloods" and a recently ennobled and new aristocracy of 
wealth, a small middle and entrepreneurial class (approximately 
15 percent), a growing working class (approximately 25 percent), 
and a class of peasant-farmers (approximately 55 to 60 percent). 

During the troubled interwar period, a time of political unrest 
and economic hardship for most Austrians, the country's main social 
groups remained rigidly segregated and there was a high degree 
of identification of specific classes with corresponding political ideol- 
ogies and worldviews. The resulting "Lager," or "camp," men- 
tality was seen in the embrace of the urban working class of social 
democracy while the rest of the country became proponents of con- 
servative Roman Catholic Christian politics or, to a much lesser 
degree, European-style liberalism (see Political Dynamics, ch. 4). 

After World War II, however, the structure of Austrian society 
changed substantially. The white-collar middle class expanded 
greatly during four decades of unprecedented prosperity. The num- 
ber of farmers and workers declined as they or their children were 
able to benefit from the postwar era's social mobility and find bet- 
ter employment. Many low-status jobs were taken by foreign work- 
ers from southeastern Europe. An increasingly white-collar service 
economy reduced the previous social inequalities and blurred tradi- 
tional class distinctions. Education became the most important ve- 
hicle of upward social mobility, and a more open education system 
made it more available than ever before. Attitudinal barriers to 
social mobility did not disappear to a corresponding extent, how- 
ever. Coming from an "established" or older family still played 
an important role in the social position Austrians were able to as- 
sume in society. 

The long period of prosperity and social mobility weakened the 
Lager mentality that had characterized the interwar period. Begin- 
ning in the 1980s, electoral patterns indicated that the traditional 



95 



Austria: A Country Study 

political allegiances of specific classes to corresponding political par- 
ties and ideologies had deteriorated. This relaxation of political ties 
permitted the formation of new political parties that profited from 
a growing pool of "floating votes." 

Family Life 

In the late nineteenth century, large sections of the Austrian 
population were effectively excluded from the institutions of mar- 
riage and family because they lacked the property and income neces- 
sary to participate in them. In Alpine and rural communities, for 
example, property ownership was a traditional prerequisite for mar- 
riage that neither day-laborers nor household servants of landown- 
ing farmers could meet. Among urban and industrial working 
classes, poverty was so widespread that it made the establishment 
of independent households and families difficult. 

During the course of the twentieth century, however, marriage 
and family have become increasingly common, especially after 
World War II, when the "economic miracle" brought prosperity 
to nearly everyone. For the first time in Austrian history, there 
was almost uniform access to these basic social institutions. Be- 
cause of this, the postwar period up through the 1960s represent- 
ed a "golden age" of the family in Austria. More than 90 percent 
of the women born between 1935 and 1945 have married — a per- 
centage higher than any generation before or since. The "two-child 
family" was considered an ideal. 

Family Developments after the 1960s 

Beginning in the 1970s, a number of trends appeared that 
represented a dramatic change in attitudes toward the ideals of mar- 
riage and family. There was a sharp drop in the birth rate and 
a decrease in family size, accompanied by a greater prevalence of 
people who had never married, people who were divorced, single- 
parent families, cohabitating couples, and marriages without children. 

In the early 1990s, fewer Austrian women were bearing chil- 
dren — an estimated 20 to 30 percent will never have a child — and 
those who have children are bearing fewer. After the end of the 
"baby boom" of the early 1960s, the Austrian fertility rate dropped 
steadily from 2.82 to an all-time low of 1 .44 in 1989 (then increased 
marginally to 1.50 by 1991). Family size has shrunk correspond- 
ingly. Marriage without children was twice as common in 1990 
(32.9 percent) as in the previous generation, and the number of 
families having three or more children dropped by more than half 
(to 10.7 percent). Families having one or two children accounted 
for roughly one-third and one-fourth of families, respectively, in 



96 




97 



Austria: A Country Study 

the early 1990s. Large families are most common among farmers, 
who have a historical and economic tradition of having many chil- 
dren, and among working-class women having little education. 

Between 1970 and 1990, the number of single-parent families 
increased almost five times faster than the traditional two-parent 
families. In 1990 there were 235,000 single-parent families in Aus- 
tria, about 15 percent of all families. Nearly 90 percent of single 
parents were women. Some of these single-parent households result- 
ed from women's conscious choice to bear children without mar- 
rying. More often, however, divorce was the cause; more than 
one-half of single parents were divorced. About one-third of the 
single parents were unmarried, and about one- tenth were widows 
or widowers. 

One of the consequences of these trends was that the average 
size of an Austrian household dropped from 2. 9 in 1971 to 2. 6 per- 
sons in 1990 and is expected to drop further. Almost 60 percent 
of the population lived equally divided between one- and two-person 
households in 1990. A large number of single-person households 
result from women's long life expectancy, which causes them to 
outlive their spouses. 

The frequency of marriage has also declined since the 1960s. 
Of the women born in the late 1930s, only 8 percent remained sin- 
gle, compared with an estimated 25 percent of women born in the 
1960s. One reason for the rise in the unmarried population is the 
increasing number of educated women who have professional and 
economic alternatives to traditional wife-mother roles. Another rea- 
son for the smaller number of marriages is that cohabitation without 
marriage has become more frequent and socially acceptable. 

Austrians are also marrying later. In 1991 the mean age of mar- 
riage was 25.6 years for women and 28.0 years for men, an in- 
crease over earlier decades. In 1981 about 59 percent of women 
and 82 percent of men were single between the ages of twenty and 
twenty-five, compared with 70 percent and almost 90 percent, 
respectively, at the end of the decade. For those between twenty- 
five and thirty years of age, the figures showed a similar rise in 
the numbers of the unmarried — 33 percent of women and over 50 
percent of men were still single at the end of the decade, compared 
with 25 percent and 40 percent, respectively, in 1981. 

The declining number of marriages is accompanied by an in- 
creased frequency of divorce. The divorce rate in Austria increased 
from 15 percent in the early 1960s to more than 33 percent in the 
early 1990s. Divorce granted on the basis of "no fault" or mutual 
consent became legal in Austria in the early 1980s. The divorce 
rate was highest in Vienna and lowest in Tirol, an indication that 



98 



The Society and Its Environment 



traditional and religious values are least binding in urban areas 
and more persistent in a traditional Alpine setting. Women who 
are employed outside of the home and have their own sources of 
income demonstrate a greater readiness to divorce than "traditional 
wives." 

More than one-third of all divorces in Austria occur within the 
first five years of marriage; thereafter, the frequency of divorce 
decreases with the length of marriage. In a survey in the early 1990s, 
more than one-half of people polled identified extramarital sex, self- 
ishness, and inflexibility as the primary causes of divorce. 

Illegitimacy has also become more frequent. Beginning in the 
1960s, the percentage of illegitimate births increased steadily, from 
11.5 percent in 1965 to 25 percent in 1991 . For first-born children, 
the rate was over 33 percent. These figures reflect tolerant atti- 
tudes toward illegitimacy in many regions in the Alps where illegiti- 
mate children were a traditional aspect of the Alpine agrarian way 
of life. Wage-laborers and servants within the households of 
landowning farmers frequently were unable to marry, but their 
offspring enjoyed a high degree of social acceptance because 
illegitimacy was common and provided the landowners with the 
next generation of laborers. Although the traditional agrarian struc- 
ture of these regions has changed considerably, the tolerance of 
illegitimacy remains. In other parts of Austria not having compara- 
ble traditions, illegitimate birth is not stigmatized to the same ex- 
tent as it was earlier. More than half of the illegitimate births in 
Austria are legalized by marriage, and the great majority of second- 
and third-born children are legitimate. The fact that the social wel- 
fare system provides more extensive benefits for single mothers than 
for married ones also can be interpreted as a financial incentive 
for initial illegitimacy in some cases. 

These changes in Austrian life- style patterns are viewed by some 
Austrians with great apprehension, and they interpret the increasing 
rate of illegitimacy, cohabitating, single-parenting, and divorce and 
the decreasing birth rate as reflections of a crisis for the traditional 
religious and social values on which the family is based. However, 
the diversification of life-styles also can be interpreted as an in- 
evitable consequence of the modernization of a traditional society, 
as well as part of the development of a more pluralistic society 
within which no particular life-style enjoys a position of predomi- 
nance. 

Status of Women 

A patriarchal family structure based on a traditional gender- 
specific division of labor characterizes attitudes toward marriage 



99 



Austria: A Country Study 

and family. By the early 1990s, however, a greater emphasis on 
marriage as a partnership had become more common among the 
younger generation, especially among the urban middle class. A 
1976 law establishes the principle of equal rights and duties for mar- 
ried men and women, as well as equal rights and responsibilities 
for caring for children. 

The Equal Treatment Law of 1979 makes various forms of dis- 
crimination against women illegal. Amended a number of times 
since it was first passed, the law seeks to establish equal rights for 
women, especially in the workplace. It posits, for example, the prin- 
ciple of equal pay for equal qualifications and sets up commissions 
for the arbitration of complaints and violations related to pay, pro- 
motion, and sexual discrimination and harassment. The Women's 
Omnibus Law, which went into effect in 1993, is a further mea- 
sure to reduce discrimination against women. One of its goals is 
increasing the employment of women in government agencies in 
which they make up less than 40 percent of the staff. The law also 
directs that women who have been denied promotions because of 
their gender or have suffered sexual harassment receive compen- 
sation. 

The Austrian concept of "equal treatment" differs substantially 
from the United States idea of "equal rights." Austrian legisla- 
tion not only aims at establishing equality in realms where there 
is discrimination against women, but it also attempts to provide 
women with additional benefits related to the inequities inherent 
in the gender-specific division of labor. Thus, it tries to establish 
benefits to compensate for "unpaid work" in the household, the 
dual burden of employment and child-rearing many women bear, 
and single-parenting. In other words, "equal treatment" involves 
interpreting equality literally in some spheres and attempting to 
compensate for the gender-specific inequality of burdens in others. 

Despite the improvement of the legal position of women in Aus- 
tria since the mid-1970s, traditional role models prevail. Whether 
women are employed outside the home or not, many Austrian men 
consider the great majority of housework and child-rearing tasks 
to be "women's work." For example, 80 percent of the married 
women surveyed at the end of the 1980s were solely responsible 
for laundry, 66 percent for cooking, and 51 percent for cleaning. 
Almost 20 percent of Austrian men do no household tasks. 
However, 75 percent of married men assume responsibility for shop- 
ping and other activities outside the home, a reflection of the divi- 
sion of labor in the traditional family between work inside and 
outside the home. 



100 



The Society and Its Environment 



Although education is the primary determinant of income in Aus- 
tria, a person's gender also plays a role. At the end of the 1980s, 
the average monthly net income for an employed woman was 
SI 2, 858 (for value of the schilling — see Glossary), or SI 1,1 61 for 
a blue-collar worker and SI 4, 790 for a white-collar employee. The 
average monthly net income for an employed man was S19,175, 
or SI 7,522 for a blue-collar worker and S24,734 for a white-collar 
employee. The pay differentials between men and women are lowest 
for those employed as civil servants (8 percent), compared with 
the private sector, where a range of 20 to 40 percent for blue-collar 
workers and white-collar employees prevails. Although sex discrimi- 
nation is responsible for some of the male-female salary differen- 
tials, men traditionally are better trained than women. More women 
in the labor force are unskilled workers than are men: 38 percent 
of women versus 25 percent of men. Additional vocational train- 
ing is much more common among men than among women: 50 
percent for men versus 28 percent for women. 

Highly educated women are more likely to be employed than 
those with less education. Around 84 percent of women between 
the ages of thirty and fifty-five having university degrees are em- 
ployed, compared with only 53 percent of women who have been 
in school for only the required nine years. The number of men 
and women in the labor force who have completed secondary or 
university educations is approximately the same: 10 and 7 percent, 
respectively. Nevertheless, equal qualifications among men and 
women are not a guarantee of equal advancement in professions. 
For example, at the end of the 1980s only 16 percent of women 
having university or advanced degrees held leading positions as 
salaried employees or civil servants. Thus, despite the improve- 
ment of the legal status of women, the income differential between 
men and women has not decreased considerably since the early 
1980s, and the implementation of equal rights legislation has proved 
difficult in practice. 

Religion 

During the Roman Catholic Counter-Reformation of the six- 
teenth and seventeenth centuries, the Habsburgs were the lead- 
ing political representatives of Roman Catholicism in its conflict 
with the Protestantism of the Protestant Reformation in Central 
Europe, and ever since then, Austria has been a predominantly 
Roman Catholic country. Because of its multinational heritage, 
however, the Habsburg Empire was religiously heterodox and in- 
cluded the ancestors of many of Austria's contemporary smaller 
denominational groups. The empire's tradition of religious tolerance 



101 



Austria: A Country Study 

derived from the enlightened absolutism of the late eighteenth cen- 
tury. Religious freedom was later anchored in Austria-Hungary's 
constitution of 1867. After the eighteenth century, twelve religious 
communities came to be officially recognized by the state in Aus- 
tria: Roman Catholic; Protestant (Lutheran and Calvinist); Greek, 
Serbian, Romanian, Russian, and Bulgarian Orthodox; Jewish; 
Muslim; Old Catholic; and, more recently, Methodist and Mormon. 

The presence of other communities within the empire did not 
prevent the relationship between the Austrian imperial state and 
the Roman Catholic Church — or the "throne and the altar" — from 
being particularly close before 1918. Because of this closeness, the 
representatives of secular ideologies — liberals and socialists — sought 
to reduce the influence of the Roman Catholic Church in such pub- 
lic areas as education. 

A relatively complicated series of treaties (or concordats) between 
the Republic of Austria and the Vatican defined the role and sta- 
tus of the Roman Catholic Church. After 1918 the Roman Catholic 
Church maintained considerable influence in public life. For ex- 
ample, many members of the church hierarchy explicitiy supported 
the Christian Social Party (Christiichsoziale Partei — CSP). Mem- 
bers of the Social Democratic Workers' Party (Sozialdemokratische 
Arbeiterpartei — SDAP) responded to this partisanship in the inter- 
war period by being explicitly anticlerical. Some Roman Catholics 
were committed to a form of "political Catholicism," which was 
anti-Liberal and anti-SDAP. Because of these sympathies, they sup- 
ported the authoritarian regime that erected a one-party "Chris- 
tian Corporatist State" in 1934. 

After the Anschluss in 1938, the Roman Catholic Church ini- 
tially pursued a policy of accommodation with the National So- 
cialist German Workers' Party (National-Sozialistische Deutsche 
Arbeiterpartei — NSDAP, or Nazi Party), but by 1939 it began to 
assume an oppositional stance. In the decades after World War 
II, the Roman Catholic Church abstained from publicly and ac- 
tively supporting any one political party. An exception to this 
restraint was the church' s involvement in the controversy surround- 
ing the legalization of abortion in Austria in the early 1970s. For 
its part, the Socialist Party of Austria (Sozialistische Partei Oster- 
reichs — SPO) developed more accommodating attitudes toward the 
Roman Catholic Church than were common before World War II. 

According to the 1991 census, a majority of Austrians (77.9 per- 
cent) belonged to the Roman Catholic Church. This is a decline 
from the 1971 figure of 87.2 percent. The number of Protestants 
also declined in the same period. The number of Lutherans, or 
members of the Augsburg Confession, declined from 5.7 percent 



102 



The Society and Its Environment 



in 1971 to 4.8 percent in 1991 according to the census, and Cal- 
vinists, or members of the Helvetic Confession, declined from 0.3 
percent to 0.2 percent in the same years. 

In 1938 the Jewish population of Austria numbered more than 
200,000, most of whom lived in Vienna. After the Anschluss, the 
community was almost wiped out by emigration and the Holocaust. 
By 1990 the community amounted to about 7,000 and consisted 
largely of postwar immigrants instead of Austrian-born Jews. 

Owing to the influx of foreign workers from Turkey and the 
former Yugoslavia, the Islamic and Serbian Orthodox communi- 
ties experienced considerable growth in Austria in the 1970s and 
the 1980s. However, many of these foreign workers do not offi- 
cially register with their respective religious organizations, and ac- 
curate information about the size of these communities is not 
available . 

The influence of the Roman Catholic Church, although still for- 
midable because of its historical position in Austrian society and 
network of lay organizations, receded in the postwar period. The 
form of nominal Roman Catholicism many Austrians practice is 
called "baptismal certificate Catholicism." In other words, most 
Roman Catholics observe traditional religious holidays, such as 
Christmas and Easter, and rely on the church to celebrate rites of 
passage, such as baptisms, confirmations, weddings, and funer- 
als, but do not participate actively in parish life or follow the teach- 
ings of the Roman Catholic Church on central issues. This trend 
can be seen in the low rate of regular church attendance (less than 
one-third of Catholics) and the high rates of divorce and abortion 
in the 1980s and early 1990s. 

Within Austria there are regional patterns of religious convic- 
tion. Generally, provinces with strong conservative and agricul- 
tural traditions, such as Tirol and Vorarlberg, followed by Lower 
Austria and Burgenland, have higher percentages of Roman Catho- 
lics than the national average, and parish churches still fulfill a so- 
cial function in many smaller communities. Religious affiliation 
is lower in urban centers, however, and Vienna has the lowest per- 
centage of any Austrian province. 

The decline in the number of Austrians professing religious af- 
filiation and the increase in the number who have no religious 
affiliation — 4.3 percent in 1971 and 8.6 percent in 1991 — may be 
interpreted as an increase in the secularization of Austrian socie- 
ty. Renouncing church membership and being without religious 
affiliation was one of the anticlerical, historical traditions of the 
SPO. In general, Austrians without religious affiliation tend to be 
associated with the SPO, whereas "active" Catholics tend to be 



103 



Austria: A Country Study 

connected to conservative parties and hold conservative political 
views. 

The increase in the number of Austrians without religious af- 
filiation should not be interpreted as an exclusively political gesture, 
however. Recognized religious organizations in Austria finance 
themselves by "taxing" their members directly with a so-called 
church tax, which amounts to approximately 1 percent of their in- 
come. Austrians who do not actively participate in their religious 
communities frequentiy officially withdraw from them in order to 
avoid paying this tax. 

Education 

Austria has a free public school system, and nine years of edu- 
cation are mandatory. Schools offer a series of vocational-technical 
and university preparatory tracks involving one to three additional 
years of education beyond the minimum mandatory level (see ta- 
ble 5, Appendix). The legal basis for primary and secondary edu- 
cation in Austria is the School Law of 1962. The federal Ministry 
for Education is responsible for funding and supervising primary 
and secondary education, which is administered on the provincial 
level by the authorities of the respective provinces. 

The country's university system is also free. The General Law 
for University Education of 1966 and the University Organization 
Law of 1975 provide the legal framework for tertiary education, 
and the federal Ministry for Science and Research funds and over- 
sees education at the university level. Twelve universities and six 
academies of music and art enjoy a high degree of autonomy and 
offer a full spectrum of degree programs. Established in 1365, the 
University of Vienna is Austria's oldest and largest university. 

Federal legislation plays a prominent role in the education sys- 
tem, and laws dealing with education effectively have a constitu- 
tional status because they can be passed or amended only by a 
two- thirds majority in parliament. For this reason, agreement be- 
tween the OVP and the SPO is needed to pass or amend legisla- 
tion relating to education. 

Private schools that provide primary and secondary education 
and some teacher training are run mainly by the Roman Catholic 
Church and account for approximately 10 percent of the 6,800 
schools and 120,000 teachers. Roman Catholic schools have a repu- 
tation for more discipline and rigor than public institutions, and 
some are considered elite institutions. Because there is no tradi- 
tion of private university education in Austria, the state has a vir- 
tual monopoly on higher education. 



104 



The Society and Its Environment 



The history of the Austrian education system since World War 
II may be characterized as an attempt to transform higher educa- 
tion from a traditional entitlement of the upper social classes to 
an equal opportunity for all social classes. Before the School Law 
of 1962, Austria had a "two-track" education system. After four 
years of compulsory primary education from the ages of six to ten 
in the elementary school, or Volksschule (pi., Volksschulen), children 
and their parents had to choose between the compulsory secon- 
dary level for eleven- to fourteen- year-olds called the middle school, 
or Hauptschule (pi., Hauptschuleri), or the first four years of an eight- 
year university preparatory track at higher schools of general edu- 
cation (Allgemeinbildende Hbhere Schulen — AHS). AHS is an umbrella 
term used to describe institutions providing different fields of 
specialization that grant the diploma (Reifeprujung or Matura) needed 
to enter university. 

Before the 1962 reform, the great majority of children — more 
than 90 percent — attended the compulsory Hauptschule, where they 
were divided according to their performance in elementary school 
into two groups: an "A group," which was directed toward two- 
to four-year vocational-technical training schools after graduation 
from the Hauptschule; and a "B group," which was required to com- 
plete one additional year of compulsory education before entrance 
into apprenticeship programs or the work force. The remaining 
elementary- school graduates — less than 10 percent — enrolled in the 
AHS at age eleven. Children attending these university-track 
schools also had to choose a specific course of study. 

The rigidity of the two-track system required that the most im- 
portant educational decision in a child's life — with all of the impli- 
cations it had for the future — be made at the age of ten. The decision 
depended to a great extent on the parents' background, income, 
and social status. Children from agricultural backgrounds or of ur- 
ban working-class parents generally attended the Volkschule and the 
Hauptschule and then entered the work force. Children having lower- 
middle-class backgrounds frequently received vocational-technical 
training after the Hauptschule, while children from the upper-middle 
and upper classes, boys in particular, attended the AHS, which 
gave them access to university-level education. 

The early selection process meant that children of the largest seg- 
ment of the population, farmers and workers, were grossly under- 
represented at higher schools and universities, whereas the children 
of a relatively small segment of the population, those who had at- 
tended higher schools or the universities, were overrepresented. 
Consequently, the education system tended to reproduce or to 



105 



Austria: A Country Study 

reinforce traditional social structures instead of being a vehicle of 
opportunity or social mobility. 

The School Law of 1962 and subsequent amendments require 
that all state-funded schools be open to children regardless of birth, 
gender, race, status, class, language, or religion. The law also at- 
tempts to introduce more flexibility into the traditional two-track 
system and to provide students with a greater degree of latitude 
within it so that educational (and hence career) decisions can be 
made at an older age. Although the primary and secondary school 
system continues to be fundamentally based on the two-track idea, 
after a series of reforms in the 1970s and 1980s, ten- to fourteen- 
year-olds are no longer streamed into A and B groups in the Haupt- 
schule. Graduates of this kind of school also have the opportunity 
to cross over into certain branches of the AHS track at the age of 
fourteen or to attend a series of different "higher vocational- 
technical schools" (Berufsbildende Hdhere Schulen and Hdhere Technische 
Lehranstalten) , which have five-year programs of specialization (see 
%. 8). 

Shifts in enrollment patterns reflect these changes in the school 
system. In the mid-1960s, less than 10 percent of all students 
finished the university preparatory AHS track, and more than 66 
percent of them were male. By the early 1990s, more than 30 per- 
cent of all students finished the AHS track and just above 50 per- 
cent of them were female. Furthermore, a second educational path 
was developed that permitted some students without a diploma from 
the university-track AHS to enroll in a university. 

As a general rule, the quality of Hauptschule education is high, 
especially in rural areas and small communities where the schools 
have maintained their traditional social importance and where at- 
tendance at an AHS involves commuting considerable distances, 
or, for the inhabitants of more remote areas, boarding. In urban 
centers with a full spectrum of educational opportunities, the Haupt- 
schule has become less popular, and parents who earlier would not 
have enrolled their children in an AHS have begun doing so. The 
increased enrollments have overburdened the AHS and created a 
shortage of students at the Hauptschulen and at vocational-technical 
schools (see table 6, Appendix). 

In some areas, this trend has been strengthened by the number 
of children of foreign workers in the compulsory schools. In 1991, 
for example, almost 30 percent of school-age children in Vienna 
were the children of foreign workers. In some districts of the city, 
these children exceeded 70 percent. Although the children of long- 
term foreign workers frequently speak German well, the numbers 
of classes in which students with inadequate mastery of German 



106 



The Society and Its Environment 

are overrepresented has overburdened the Hauptschule system and 
made it a less desirable alternative than in the past. Therefore, spe- 
cial remedial and intercultural programs are being developed so 
that the compulsory school system in Austria can continue to ful- 
fill its educational and social roles. 

The SPO has continued to press for further reforms of the school 
system. It argued for an abolition of the two-track system for ten- 
to fourteen-year-olds and for combining the Hauptschule and the 
first four years of the AHS into a new comprehensive middle school. 
As of 1993, however, because of the resistance of other political 
parties, this alternative has been limited to a number of experimen- 
tal schools. 

As a result of the reforms since the 1960s, the university system 
has changed from one serving the elite to one serving the masses. 
The increasing number of students at Austrian universities reflects 
the liberalization of educational policy at secondary and higher lev- 
els. Between the 1955-56 and 1991-92 academic years, the num- 
ber of students enrolled in institutions of higher education increased 
from about 19,000 to more than 200,000 (see table 7, Appendix). 
The number of students beginning university-level education af- 
ter having completed the AHS program also increased and amount- 
ed to 85 percent in 1990, compared with 60 percent in the mid- 
1960s. 

The reforms have also meant that university education ceased 
to be a male privilege. Between the 1960-61 and 1991-92 academic 
years, the number of female students enrolling in universities rose 
from 23 to 44 percent. Yet, although women account for almost 
half of the students at university level, only 2 percent of the profes- 
sors at institutions of higher learning were women in 1990. 

Despite the increase in the numbers of university students and 
the greater presence of women, universities remain primarily the 
domain of middle- and higher-income groups. The number of stu- 
dents with working-class backgrounds has doubled from 7 to 14 
percent, and the number of these with agricultural backgrounds 
increased from less than 2 percent to more than 4 percent between 
1960 and 1990. But children of white-collar workers, civil servants, 
and the self-employed accounted for more than 80 percent of enroll- 
ments at Austrian institutions of higher education in the early 1990s. 

Increased accessibility to university-level education has a num- 
ber of consequences. The dramatic expansion in the number of 
students has led to overcrowding at many institutions. Some crit- 
ics maintain that the increasing number of students diminishes the 
overall quality of university-level education despite increases in fed- 
eral investment. One obvious problem was that more than 50 



107 



Austria: A Country Study 











Age 




TEACHE 
COLLEC 


Z PR =r — " 




Grade 
Level 






CO 








13 








17 


•i O 


— ' 






16 _ 


11 


APPRENTICESHIP 
AND 


TEACHER 
AND 




15 _ 


10 


INTERMEDIATE F 
VOCATIONAL 


ACADEMIC 

: ULL-LENGTH 

HIGH SCHOOL 

VOCATIONAL 




•4 A 

14 


9 


1 If AIIMINU 


TRAINING 






8 






O 


13 _ 






12 


7 


SECO 


NDARY 


M P 


1 1 


6 


EDUC 


NATION 


10 _ 


c 

o 






c 


9 _ 


A 

3 


PRII 


MARY 


I - 
W 


8 




EDUCATION 


o 


7 _ 


2 










1 






< 


6 









Source: Based on information from Austria, Federal Press Service, Austria: Facts and Figures, 
Vienna, 1990, 119. 

Figure 8. Structure of the Education System, 1993 



108 



The Society and Its Environment 



percent of students enrolled at the universities in the 1980s did not 
successfully complete a degree program. Complex reasons account 
for this high drop-out rate. Some students enroll simply to acquire 
student benefits. Others study for the sake of personal enrichment 
without intending to get a degree. Some are unable to complete 
their studies for financial reasons. Although a university degree 
provides students with a substantial amount of social status and 
better income opportunities, there has been an increase in "aca- 
demic unemployment, ' ' especially among degree-holders in the hu- 
manities and social sciences. 

Debates about educational policy in Austria frequently are the 
result of different perspectives related to the strengths and weak- 
nesses of the traditional education system. Proponents of the two- 
track secondary system, for example, defend it as performance 
oriented and criticize the leveling of achievement or lowering of 
standards the introduction of one compulsory middle school would 
involve. Conversely, opponents of the two-track system criticize 
its rigidity and inherent absence of equal opportunity. Consequent- 
ly, such bipolar terms as performance and leveling, elite and mass edu- 
cation, and achievement and equal opportunity prevail in educational 
debates. In some respects, Austrians of different political and educa- 
tional policy persuasions may expect too many different things from 
one university system. They expect it to provide general educa- 
tion, as do state university systems in the United States, and "Ivy 
League" performance at the same time. 

Social Security 

The origins of the contemporary Austrian social security sys- 
tem date back to the end of the nineteenth century, when rudimen- 
tary forms of social security were introduced for specific occupational 
groups. Workers, employees, civil servants, farmers, and the self- 
employed each paid into a different social security plan. Workers 
and employees in Vienna, for example, paid into a different social 
security fund than did civil servants in Vienna or farmers in Tirol. 
The main thrust in the development of the country's social security 
system in the twentieth century has been the creation of a unified 
social insurance policy for all occupational groups. 

The organization of the social security system is complex. The 
General Social Insurance Act of 1955, which has been repeatedly 
amended, sets social security policy and makes decisions on such 
matters as the level of social security payments and the kind and 
extent of benefits. However, tax revenues are collected and bene- 
fits are dispersed by individual insurance agencies or "carriers" 
for specific occupational groups. In this respect, the social security 



109 



Austria: A Country Study 

system is a national plan in terms of federal legislation but is not 
centrally funded or administered. 

The extent of social security coverage and the number of benefits 
increased in Austria steadily from the end of World War II until 
the early 1980s. As a result, Austria was among the most highly 
developed welfare states in the world and had a complicated sys- 
tem of direct taxes on employers and employees and indirect taxes 
that financed a broad spectrum of benefits. 

After the early 1980s, social policy entered a phase of consolida- 
tion characterized by difficulties related to funding extensive so- 
cial security programs, growing levels of unemployment, stagnating 
economic growth, increasing budget deficits, and the demograph- 
ics of an aging population. However, as of 1993, Austria had 
managed to maintain its high level of social security without major 
reductions in benefits. 

Employment, Unemployment, and Pension Benefits 

As of the early 1990s, the standard work week in Austria was 
forty hours, although some occupational groups have negotiated 
a thirty-eight-and-one-half-hour week. Minimum wages and sal- 
aries are negotiated by trade unions and the representative bodies 
of employers, and individual professional groups negotiate increases 
in wages, salaries, or benefits on the basis of collective bargain- 
ing. Salaries are paid fourteen times a year, and two special pay- 
ments, usually on June 1 and December 1, are taxed at lower rates 
than regular salaries. In addition, Austrians are entitled to five 
weeks of paid vacation annually. 

All people gainfully employed, employees as well as the self- 
employed, are subject to compulsory insurance, which includes un- 
employment, disability, retirement, and provisions for surviving 
dependents. The right to draw unemployment is contingent on hav- 
ing worked for at least one year. Unemployment benefits range 
from 50 to 70 percent of the recipient's previous net pay and are 
limited to a period of seven months. After this period expires, the 
unemployed can qualify for a series of different support programs 
depending on need. 

As of the early 1990s, the legal retirement age was sixty-five years 
for men and sixty years for women. However, only 10 percent of 
men and 50 percent of women actually work until those ages be- 
cause they may qualify for disability pensions or take advantage 
of provisions that allow contributors to retire after paying into a 
pension fund for thirty-five years. Retirement pensions are generally 
calculated on the basis of the level of income during the last ten 
years of payment and the overall length of the period of contribution. 



110 



The Society and Its Environment 



For example, if a person's "full working life" is forty-five years, 
he or she receives a pension equivalent to about 80 percent of his 
or her previous net income, which is adjusted on a regular basis 
to compensate for subsequent increases in the cost of living. A widow 
receives 60 percent of her late husband's pension. 

More than two-thirds of the expenditures for pensions are directly 
covered by payments of employers and employees into pension 
funds, and the balance is funded by the federal budget. However, 
given Austria's liberal early retirement practices and demographic 
trends, the ratio between the active work force and retired persons 
in Austria is deteriorating and could reach 1:1 by the year 2020. 
Because of this trend, experts recognize that a reform of the pen- 
sion system is inevitable, and the financing of social security 
benefits, which were introduced under fortuitous conditions of eco- 
nomic and demographic growth in the 1960s and 1970s, is becom- 
ing an increasingly pressing issue. A reduction of the level of benefits 
or the introduction of a "flat-rate" pension, which does not take 
previous salary and contribution differentials into account, are two 
possible alternatives. 

Health and Health Insurance 

In the late 1980s and early 1990s, the most common causes of 
death were cardiovascular diseases, followed by cancer. Accidents 
were the next most common causes of deaths in males. Respiratory 
diseases and liver problems were also significant causes of deaths 
(see table 8, Appendix). 

The traditional Austrian diet is high in fats, carbohydrates, and 
sugar. Smoking is common — 20 percent of women and 40 percent 
of men smoke. Most adults regularly consume alcohol, in particu- 
lar beer and wine. An estimated 250,000 Austrians are alcoholics, 
and the incidence of alcoholism is twice as high among men as it 
is among women. As a result of these unhealthy habits, the inci- 
dences of cardiovascular diseases and cirrhosis of the liver are among 
the highest in Western Europe. 

Beginning in the mid-1980s, Austrian health authorities attempt- 
ed to make the general public more aware of the dangers of 
cholesterol, smoking, and alcohol. The government introduced a 
program of preventive check-ups under the auspices of various 
health insurance plans. As of 1990, however, only negligible in- 
roads had been made into traditional patterns of consumption, 
which were more pronounced among men than women and con- 
tributed to the higher incidence of fatal disease and the lower life 
expectancy of men in Austria. 



Ill 



Austria: A Country Study 

Austria ranks behind Hungary and Finland as a country with 
one of the highest suicide rates in Europe. Although some psychol- 
ogists attribute the high rate to the national psyche — such as an 
inability to openly carry out conflicts or the tendency to direct ag- 
gression toward oneself — there is no generally accepted explana- 
tion for this phenomenon. As elsewhere, men in Austria are almost 
three times more prone than women to commit suicide. 

Public health authorities have had to deal with the spread of ac- 
quired immune deficiency syndrome (AIDS) since 1983, when the 
first cases were noted. As of mid- 1993, slightly more than 600 Aus- 
trians had died of AIDS. The number of those infected with the 
human immunodeficiency virus (HIV) was not known at that time, 
but estimates range between 8,000 and 14,000. 

By 1990 state-required health insurance covered 99 percent of 
the population in Austria. Austrians also are required to pay into 
compulsory health insurance plans, which are similar to pension 
plans and are funded by employer and employee groups organized 
by professions. Foreign workers also are covered by these programs. 
Active employees and the self-employed, their dependents, the re- 
tired, and the socially disadvantaged qualify for medical coverage 
that includes out-patient treatment, medication, some dental work, 
surgery, and hospitalization in the so-called general class (general 
wards as opposed to private rooms) . With the exception of minimal 
flat-rate charges for filling prescriptions and 10 percent of the overall 
charge for the hospitalization of dependents, out-patient and in- 
patient treatment is free for individuals covered by the health in- 
surance plans. 

Out-patient treatment is almost exclusively handled by physi- 
cians who have contracts with specific insurance agencies, and pa- 
tients are free to seek the physician of their choice provided the 
physician has a contract with the patients' respective insurance agen- 
cy. Although many physicians are in private practice, the great 
majority of them rely on these contracts — which regulate fees for 
services rendered — to generate the income they need to maintain 
their practices. This arrangement means that Austrian medicine 
is not "socialized" in the sense that physicians are employees of 
the state. However, the system is similar to a national health plan 
insofar as fees are regulated, and there is an exceptionally high 
degree of coverage for the population at large. A drawback to this 
system is that because physicians are free to establish their prac- 
tices wherever they choose, medical coverage is poorer in rural areas 
than in urban centers. 



112 



Folk dancers in traditional dress 
Courtesy Austrian National Tourist Office, New York 

Family Benefits 

Austria maintains an extensive support scheme for families. For 
example, it is illegal for pregnant women to work eight weeks be- 
fore their due date and eight weeks after their delivery, and they 
receive their full net pay during this period. Parents of newborns 
can take two years of maternity or paternity leave or split the leave 
time between both parents. They receive a monthly support pay- 
ment of S5,100 (S7,500 for single mothers or low-income couples) 
during that time. Employers also are required to rehire them in 
positions of equal pay and status after the leave period is over. Spe- 
cial payments totaling SI 5, 000 are made for all children between 
birth and their fourth birthday. In addition, all mothers receive 
a monthly child-maintenance allowance of SI, 400 for children up 
to age ten, at which time the allowance is increased to SI, 650 for 
children up to age twenty-one if the child is living at home, in school, 



113 



Austria: A Country Study 



or unemployed. These payments increase to SI ,950 and are made 
for children up to age twenty- seven if the child is attending voca- 
tional training or enrolled in a university program. 

Special provisions exist for single-parent and large low-income 
families. Single mothers and low-income families having more than 
two children are most likely to be confronted with severe economic 
hardship, and benefits for many members of these groups need to 
be improved to prevent them from slipping below the poverty level. 
However, the policy of providing higher benefits for unwed mothers 
is controversial. Because unwed mothers who cohabit with their 
partners receive the same benefits as single mothers, the higher 
benefits for single mothers create a financial incentive that can en- 
courage illegitimacy. Married couples with children are eligible for 
fewer benefits and view themselves as disadvantaged in compari- 
son with unwed, cohabiting parents. 

Housing 

After World War II, Austria's standard of housing was low, a re- 
flection of the historically low quality of urban and rural housing, 
the poor economic development of Austria in the interwar period, 
and the destruction during World War II. Overcrowding was wide- 
spread, especially in urban centers and among the working classes, 
and many living units did not have such modern conveniences as 
running water, toilets, bathing facilities, or central heating. In 1951, 
for example, only one-third of the country's living units had run- 
ning water; less than 31 percent had a toilet on the premises; and 
only 11 percent had bathing facilities. Stoves using coal, oil, or 
wood as fuel were the most common forms of heating. 

Since then, however, Austrian housing has improved consider- 
ably. The number of living units has increased by 53 percent, 
although the population grew by just over 10 percent, and almost 
all of the living units built since 1945 have all modern conveniences. 
Furthermore, improvements have been made in many of the liv- 
ing units built before World War II, although there remains a clear 
gap between the overall standards of old and new buildings. Seri- 
ously substandard housing — living units with running water, but 
without toilets or bathing facilities on the premises — has been 
reduced to less than 10 percent of the total. Most of this housing 
is found in cities. Low- income groups, such as the elderly, unskilled 
workers, and foreign workers, are the most frequent inhabitants 
of substandard housing. 

As of the early 1990s, just over 55 percent of all Austrians owned 
their own homes or apartments, either as private individuals or 
under the auspices of ownership cooperatives. The rate of home 



114 



The Society and Its Environment 



ownership is higher in rural areas than in urban areas and higher 
in western and central Austria than in the east. In urban areas, 
apartment houses are much more common than single-family dwell- 
ings. Renting is more common in cities and in eastern Austria. 
Renters have considerable legal rights that make the termination 
of leases difficult and that provide for the regulation of rents. The 
construction and ownership of apartment buildings by the municipal 
government are common in cities, such as Vienna, which tradi- 
tionally have social democratic municipal governments. 

By 1990 almost 10 percent of Austrians had a "second resi- 
dence," used predominantly for recreational purposes. These sec- 
ond homes range from garden plots with huts (Schrebergarteri), located 
on the outskirts of the cities, to old houses in rural communities 
and newly built one-family houses in the country. 

At the beginning of the 1990s, around 25 percent of an average 
Austrian household's expenditures was for housing (mortgage or 
rent and utilities). Another 25 percent went for food (including al- 
cohol and tobacco), and a further 16 percent was spent on trans- 
portation (including automobile payments). About 9 percent was 
spent on furnishings, 11 percent for clothing, education, or recre- 
ation, and the remainder for miscellaneous activities. 

No scholarly work in English treats Austrian society as a whole. 
John Fitzmaurice's Austrian Politics and Society Today examines the 
development and roles of Austria's most important sociopolitical 
organizations. Although they are somewhat dated, a number of 
chapters from Modern Austria, edited by Kurt Steiner, are good 
historical and in-depth introductions to various aspects of Austrian 
society. Specific chapters in Austria: A Study in Modern Achievement, 
edited by Jim Sweeney and Josef Weidenholzer, offer a less detailed 
but more current analysis of many facets of Austrian society. Lonnie 
Johnson's Introducing Austria provides readers with some general 
insights into the dynamics of the development of Austrian society 
as a whole. 

The Austrian government is responsible for a range of informa- 
tive publications. The Federal Press Service's small hook Austria: 
Facts and Figures is a good overview of the country's society, econo- 
my, and politics. The service also publishes a series of brochures 
in English and German that deal with specific aspects of Austrian 
society such as immigration, religion, education, and social secu- 
rity. These publications are available from Austrian embassies, con- 
sulates, and cultural institutes around the world. The annually 



115 



Austria: A Country Study 



revised Survey of the Austrian Economy from the government's Aus- 
trian Museum for Economic and Social Affairs in Vienna contains 
some social data. Scholarly publications in German from the Os- 
terreichisches Statistisches Zentralamt contain much information 
about Austrian society. Particularly valuable are Sozialstatistische Dat- 
en and Statistisches Jahrbuch fur die Republik Osterreich, both of which 
appear on a regular basis. (For further information and complete 
citations, see Bibliography.) 



116 



Coat of arms of the province of Carinth 



THE AUSTRIAN ECONOMY MIGHT best be characterized 
by the old German phrase klein aber fein, or — in the loose English 
equivalent — "small but beautiful." Austria is a small European 
country in terms of gross domestic product, area, and population. 
Yet, since the end of World War II, it has achieved a remarkable 
record of growth, even when international conditions have not been 
at their most favorable. Austria has done this by concentrating on 
manufacturing the products of the second industrial revolution — 
such as high-quality machine tools, chemicals, and other producer 
goods — and exporting them largely to the countries of Western Eu- 
rope, especially Germany. 

Austria has achieved considerable autonomy in many important 
economic areas. It is almost self-sufficient in food production, largely 
through careful development and husbanding of resources and 
through an extensive program of subsidies. Judiciously planned 
exploitation of the hydroelectric power- generating capacity of the 
Alps has lessened the country's dependence on imported fossil fuels. 
Austria has also been able to train an efficient and dedicated work 
force, although it has come to rely on foreign workers for some 
essential tasks. 

Austria nonetheless remains fully engaged in the European and 
global economic environment. It must import fuels — especially oil, 
coal, and gas — and certain industrial raw materials and as a result 
has had a consistent trade deficit. But, because the country is one 
of the most attractive states in Europe to foreign tourists, Austria 
is generally able to keep its current account in balance. 

The Austrian government has long recognized that the country 
and the economy cannot function without trade and without ac- 
cess to other markets and sources. Therefore, Austria has always 
wanted to join customs unions and free-trade areas. It was a found- 
ing member of the European Free Trade Association (EFTA). Be- 
cause it could not join the European Community (EC), owing to 
its pledge of political neutrality, it helped form the European Eco- 
nomic Area, out of the EC and EFTA, in late 1992. In 1989 it 
had applied to join the EC and is regarded as a prime candidate 
for admission into the organization, known since late 1993 as the 
European Union (EU), in 1995. 

Austria saw many opportunities opening to the East as the Iron 
Curtain fell and as the former communist economies turned to the 
West for trade and guidance. As a result, Austria ranks among 



119 



Austria: A Country Study 

the top Western nations in opening joint ventures with East Euro- 
pean states and has made a variety of trade agreements with those 
states as well as with the states that had declared their indepen- 
dence from what was Yugoslavia. Some of the links that Austria 
established and reestablished antedated World War I and thus offer 
a potential for the re-creation of historical financial and commer- 
cial links. 

Since the end of World War II, the Austrian economy has func- 
tioned in a comfortable niche among the smaller West European 
states. It has been sheltered from intense international competi- 
tion because it is only a small market, although the price of many 
Austrian goods is higher than international prices. The Austrian 
system of economic and social consensus, characterized by the term 
social partnership, has functioned effectively to permit a high stan- 
dard of living for its citizens and especially for its labor force. The 
chambers of commerce, agriculture, and labor, together with the 
trade unions, have joined and supported a considerable framework 
of institutions and regulations that make Austria a model for rela- 
tions between public and private institutions. 

Despite its carefully designed and effectively functioning system, 
the economy has not been immune to external realities. It was se- 
verely shaken by the "oil shocks" of the 1970s and by the sharp 
global recession at the beginning of the 1980s. The accumulation 
of public-sector deficits imposed a heavy burden of debt service 
on the economy. Austria's recovery from that recession did not 
fully begin until the mid-1980s, although the recovery advanced 
smoothly after that and accelerated during the late 1980s before 
the economy suffered another recession beginning in 1990. 

With the end of the Cold War and the consolidation of Europe, 
the economy faces the problems of greater exposure to outside in- 
fluences and potential outside competition. As this opening occurs, 
the Austrian economy also must cope with the potential buffeting 
arising from the EU adoption of the Maastricht Treaty as well as 
with other pressures resulting from developments since the end- 
ing of the division of Europe. The Maastricht Treaty's provision 
for a common European currency could compel West European 
countries and central banks to pursue more cautious fiscal policies 
and more restrictive monetary policies than in the past. Although 
the Austrian government and the central bank have long pursued 
such restrictive policies in order to keep the country's currency, 
the schilling, on a par with the German deutsche mark, the pres- 
sures on other currencies could intensify while the deutsche mark 
establishes itself as the dominant currency of Europe. This could 
jeopardize Austrian markets in the EU. 



120 



The Economy 



Austria's membership in the EU could also open Austrian mar- 
kets more directly to the competition of large West European com- 
panies that not only enjoy economies of scale but also are more 
able than Austrian companies to withstand the rigors of long-term 
competition. And, the fall of the Iron Curtain has opened Austria 
to greater competition from Central and East European states hav- 
ing lower production costs. Conversely, Austrian exporters also 
have a wider playing field on which to show their wares. Thus, 
Austrian planners have both many opportunities and many prob- 
lems to contemplate as they try to maintain and extend the pros- 
perity and economic success that their country has enjoyed in the 
postwar period. 

Economic Growth and Government Policy 
Historical Background 

After World War I and the breakup of Austria-Hungary (also 
seen as the Austro-Hungarian Empire), Austria faced serious prob- 
lems of economic and social adjustment in finding a means of liveli- 
hood for its 6.5 million people, one- third of whom lived in Vienna. 
Without an adequate agricultural and mineral base in the territory 
left to it and with the old trading relations of the relatively self- 
sufficient empire and customs union broken, Austria found itself 
without adequate food supplies for its population and without suffi- 
cient coal for its industry. At the same time, its industrial capacity 
was excessive for the reduced home market. Relief credits grudg- 
ingly given by the Allies kept the country from complete chaos for 
a time, but devastating inflation in the early 1920s brought it close 
to economic collapse. Finally, in 1922, a League of Nations com- 
mission agreed on a program of international financial support that 
brought currency stabilization and a balanced budget. 

Under the austerity program that ensued, considerable progress 
was made toward economic reconstruction. Because of the austerity, 
however, it was also a period of high unemployment and political 
and social unrest (see The First Republic, ch. 1). When the world- 
wide depression that began in 1929 put an end to this brief period 
of economic progress, Austria was ripe for the disorders of the 1930s 
and for the annexation (Anschluss) by Germany in 1938 (see The 
Anschluss and World War II, ch. 1). This takeover brought an 
unanticipated measure of economic recovery to Austria as a result 
of the German buildup of war potential. In order to serve Nazi 
goals of conquest, most of the existing Austrian industries were 
expanded and modernized, and several new industrial complexes 
were established. 



121 



Austria: A Country Study 

Austria emerged from World War II with its economy shattered. 
The loss of life and the damage to industry and transportation had 
decreased production to only one- third of its prewar level. Reestab- 
lishment of the economy was both hampered and helped by the 
division of Austria into four Allied occupation zones after the war 
and by the ensuing ten-year period of foreign occupation. The 
presence of foreign troops encouraged the Austrian people into a 
more cooperative attitude toward each other and toward their lead- 
ers than that which had prevailed in the interwar period. As a result, 
the uncompromising divisiveness that had dominated Austrian eco- 
nomic, social, and political life between the wars gave way to a 
spirit of cooperation that extended well after the occupation ended 
(see Restored Independence under Allied Occupation, ch. 1). 

During the occupation, the primary objective of the Soviet Union 
seemed to have been the exploitation of the Austrian economy. 
Although the Western Allies had successfully prevented the exac- 
tion of outright reparations from Austria, they agreed to give the 
Soviet Union "full and unqualified title" to all German assets in 
eastern Austria, that is, the part of Austria under Soviet occupa- 
tion. Soviet leaders put the broadest possible interpretation on the 
term German assets and dismantled and removed to the Soviet Union 
much of the movable industrial equipment. Fixed installations were 
formally confiscated and put into production to serve Soviet in- 
terests. When the occupation ended with the signing of the State 
Treaty in May 1955, the Soviet Union had under its control some 
450 firms with 50,000 employees — about 10 percent of the Austrian 
industrial labor force. Under the terms of the treaty, Austria agreed 
to make reparation payments to the Soviet Union in oil, other 
goods, and cash to compensate for the return of these Soviet- 
controlled assets. The payments, which were completed in 1963, 
totaled S7.1 billion (for value of the schilling — see Glossary). 

The Western Allies, in contrast, invested considerable effort, 
money, and material under United States leadership in reconstruct- 
ing the Austrian economy. The initial effort consisted primarily 
of relief goods channeled through the United Nations Relief and 
Rehabilitation Administration (UNRRA). This program, involving 
over US$300 million from the United States alone, was replaced 
in 1948 by the European Recovery Program (commonly known 
as the Marshall Plan). Under the plan, the United States provided 
US$962 million in aid in the form of consumer goods, raw materials, 
and capital equipment. The total amount of foreign aid received 
by Austria between 1945 and early 1955 was US$1.6 billion. 

The contrasting policies of the Soviet Union in the eastern zone 
and those of the Western Allies in the rest of Austria had significant 



122 




123 



Austria: A Country Study 

implications for the future of the Austrian economy. In the first 
place, most United States aid went for economic reconstruction 
in the Allied occupation zones, rather than in the Soviet areas, to 
prevent its suffering the fate of capital assets already in Soviet hands. 
This meant, in turn, the creation of employment opportunities in 
western Austria that, together with the more relaxed living condi- 
tions and political freedoms, stimulated a steady movement of the 
population westward from Soviet-occupied eastern Austria. Thus, 
the industrialization of the Austrian hinterland, which had started 
for military purposes during the Nazi occupation, was further ad- 
vanced. Finally, the more constructive behavior of the Western Al- 
lies encouraged cooperation with Austria's coalition government 
and created an atmosphere of continuing cooperation, virtually 
guaranteeing a Western orientation for Austria's economic poli- 
cies after the occupation. 

Within the limited scope of economic matters left for Austrian 
determination during the occupation, two major developments car- 
ried over into the postoccupation period and had significant in- 
fluence on the future course of the economy. The first was the 
nationalization of a large segment of Austria's heavy industry. The 
second was the establishment of a mechanism for coping with in- 
flationary pressures through joint agreements on wages and prices 
reached by the representatives of business, agriculture, and labor. 

The nationalization acts of July 26, 1946, and March 26, 1947, 
were designed to effect the systematic reconstruction of the basic 
materials industries after the heavy damages suffered during the 
war, to channel their output and services toward the reconstruc- 
tion of other elements of the Austrian economy under impartial 
government direction, and to maintain some degree of Austrian 
control over these assets during the occupation. Although the Soviet 
Union objected to the nationalization laws insofar as they applied 
to former German properties, the other Allies were able to over- 
ride Soviet efforts to block these laws. The Soviet Union did pre- 
vent their application in the Soviet Zone. As a result, about half 
the enterprises there, including the entire petroleum industry, were 
kept from Austrian control until after the occupation ended. 

About seventy industrial enterprises and plants were selected for 
nationalization. The enterprises and plants included the most im- 
portant lignite mines, the largest iron and steel works, the nonfer- 
rous metals mining and smelting works, the most important 
petroleum extraction and processing installations, a number of firms 
involved in steel construction and in mechanical engineering, a 
major chemical concern, and a major shipping company. Outside 
the manufacturing sector, the three largest credit institutions and 



124 



The Economy 



the most important electrical energy installations were also nation- 
alized. 

The problem of compensation to the former owners, which had 
been left undetermined by the original legislation, was covered by 
laws passed in 1954 and 1959. Under this legislation, compensa- 
tion was largely covered by issuing federal bonds to the former own- 
ers. These bonds, together with the small cash sums paid out, 
amounted to about S515 million. 

The second economic event of fundamental importance was es- 
tablishing mechanisms to settle wage-price disputes. The initial 
wage-price agreements were stimulated by unusual inflationary 
pressures in 1947, which had increased prices nearly threefold since 
the end of the war. Possibly with the specter of the inflationary 
period of the early 1920s in mind, four key interest groups — the 
chambers of commerce, agriculture, and labor and the Austrian 
Trade Union Federation (Osterreichischer Gewerkschaftsbund — 
OGB) — joined forces. They established the Economic Commission, 
negotiated a schedule of fixed prices for essential goods and ser- 
vices, and adjusted wages and pensions to that schedule. Although 
the Economic Commission had no legal standing and compliance 
was voluntary, the first of these agreements, covering the period 
from August through October 1947, was sufficiently successful to 
lead to a series of renewals over the next four years. These agree- 
ments slowed, but did not stop, the rate of inflation, which aver- 
aged 35 percent annually until 1951. Additional stabilization 
measures were necessary that year, including credit restrictions, 
an increase in the bank rate, and such fiscal measures as cuts in 
government spending and increases in taxes. Most important, 
however, these measures were accompanied by voluntary price 
reductions and a postponement of wage demands arrived at through 
the wage-price agreement procedure. This brought a degree of price 
stability, in marked contrast to the inflationary explosion of the 
comparable period after World War I. 

At the time of the signing of the State Treaty in May 1955, the 
economy had largely recovered from the effects World War II . The 
gross domestic product (GDP— see Glossary), in constant prices, 
had more than doubled since 1946, the first full year of peace, and 
was 47 percent above that of 1937, the last full year of Austrian 
independence. Although industrial facilities in the Soviet Zone that 
had been returned to Austrian control were in poor condition — 
particularly the oil fields — most of the industrial structure in the 
Allied occupation zones had been revived and modernized, largely 
through the application of Marshall Plan funds. Relative price sta- 
bility had been achieved, and the 1955 unemployment rate of 



125 



Austria: A Country Study 

5.8 percent, although high by subsequent standards, was at least 
an improvement over the 1953 rate of 8.8 percent and was tend- 
ing downward. Finally, Austrian independence arrived at a time 
of growing European prosperity as the full effects of the Marshall 
Plan were being felt. Thus, Austria was able to take its place in 
the economy of Western Europe and to share in the prosperity that 
characterized the postwar period. 

Developments During the 1970s and 1980s 

After a relatively smooth course throughout the 1960s, Austria 
was deeply affected by several international developments during 
the early 1970s. Like the Federal Republic of Germany (West Ger- 
many), it revalued its currency upward by 5 percent, but this proved 
insufficient in light of the weakness of the United States dollar. 

In August 1971, when the Bretton Woods system (see Glossary) 
collapsed and the price of gold was no longer maintained at US$35 
per troy ounce, the Austrian government reaffirmed its decision 
to maintain the stability of the schilling even if it meant a poten- 
tially deteriorating competitive position with the dollar. Thus, the 
schilling remained closely linked to the deutsche mark through the 
interest rate policies of the Nationalbank (the Austrian central 
bank) . 

The Austrian economy could not help being affected, however, 
by the subsequent turmoil in international trade and finance, the 
"oil shocks," inflation, and the downturn at the end of the 1970s. 
By 1975 growth had slowed and inflation had risen because of higher 
fuel prices. Unemployment had begun to increase and would have 
risen faster if government-owned industries had not made an ef- 
fort to maintain employment. The current account, which had re- 
mained in balance for most of the postwar period, deteriorated 
significantly. In addition, the budget deficit rose. 

In 1979 and 1980, the Austrian economy began to improve some- 
what. Growth resumed and unemployment fell. But exports did 
not rise as hoped, the budget deficit remained high, and the boom 
was short-lived. Another downturn appeared, to be overcome only 
at the expense of considerable fiscal stimulus in 1983 and 1984 when 
the government budget deficit rose from 4 to 5.5 percent of GDP. 
After several years of high deficits, the cost of servicing the na- 
tional debt began to serve as a brake on further expansionary fis- 
cal policies. Although unemployment remained low by the standards 
of other industrialized states and although the Austrian economy 
came through the various crises better than most economies, these 
developments provided little consolation for most Austrians. The 
only good news was that exports were rising, although the current 



126 



The Economy 



account remained negative as the strength of the dollar drove energy 
import costs sharply upward. 

It was only in 1985, well after global interest rates had declined 
from their post- 1980 highs, that the economy began moving for- 
ward again at an acceptable pace. Even then, growth came more 
slowly and unevenly than in the 1950s and 1960s, in part because 
the expense of servicing the accumulated public deficit (which by 
then had risen to almost one-half of GDP) remained a brake on 
the economy as a whole. When rapid growth resumed in 1988, it 
took many observers by surprise. At that point, the rising trend 
of unemployment experienced since 1981 began to decline, and 
the volume of investment and exports grew sharply. 

The New Policies 

In 1987 the government had decided that the Austrian econo- 
my needed certain structural reforms if it were to remain competi- 
tive in Europe and in the world. The new coalition government, 
formed by the Socialist Party of Austria (Sozialistische Partei Oster- 
reichs — SPO) and the Austrian People's Party (Osterreichische 
Volkspartei — OVP), was spurred to take action as a result of two 
significant factors: the passage by the European Community (EC — 
see Glossary) of the Single European Act, designed to lead to 
a much closer economic union of EC member states; and Aus- 
tria's poor growth rate, which lagged behind that of the Euro- 
pean members of the Organisation for Economic Co-operation 
and Development (OECD — see Glossary). Those reforms were 
aimed principally at fiscal and financial stability for the govern- 
ment sector and at greater efficiency for the private sector. The 
government later reinforced these measures in order to meet the 
requirements for establishing the European Economic Area 
(EEA — see Glossary). 

The measures included steps aimed at reducing the fiscal deficit 
as a share of GDP. The budget deficit began to be brought down 
to the target level of 2.5 percent of GDP, although somewhat more 
slowly than the planners had hoped. The government also an- 
nounced a comprehensive restructuring of the state-owned Aus- 
trian Industries, the giant national company that had taken over 
most of the heavy industry left to Austria by the retreat of the Ger- 
mans after World War II. 

The restructuring efforts moved apace for several years after the 
government decision of 1987. The single most important area from 
the standpoint of the government was the reduction of the ever- 
growing federal share of the economy. A series of measures were 



127 



Austria: A Country Study 

implemented to cut the federal share of GDP from 23 to 2 1 per- 
cent and to reduce the provincial and municipal governments' share 
of GPD from 17.4 to 16.8 percent between 1986 and 1990. 

One of the principal objects of reducing the size of the federal 
government was to control the interest burden of the government 
sector, a burden that had risen rapidly during the early 1980s. 
Another was to reduce the government sector's gross indebtedness. 
The first of these measures had little effect because the interest bur- 
den had risen from 18.0 percent of total government tax revenues 
to 23.5 percent by 1991. The second measure was more successful 
because the ratio of the new deficit to GDP stabilized at about 2.5 
percent, but the government sector's gross indebtedness nonethe- 
less continued to rise, reaching the level of 56.5 percent of GDP 
by 1991. For a government that contemplated joining the EC and 
the European Monetary Union (EMU — see Glossary), that level 
was dangerously high. It was almost as high as the limit of 60 per- 
cent that the EC had set in December 1991 as the maximum level 
acceptable for states that wished to join the EMU. 

One reason the government had difficulty managing its own 
budget was that more than 85 percent of the central government 
budget expenditures were committed to nondiscretionary items, 
such as civil service salaries and social security benefits. The govern- 
ment consistently found itself severely constrained in trying to 
reduce or even to control the remaining discretionary elements. 

As for Austrian Industries, some reduction in personnel was ac- 
complished as part of the reform, but the slump in global steel and 
chemical markets left considerable uncertainty as to whether more 
restructuring might not be needed. Privatization also made some 
headway with the sale of the mint to the Nationalbank in 1 989 and 
a reduction in the government's share in Austrian Airlines and 
several major financial institutions. 

While efforts to amend and strengthen the cartel law to increase 
domestic competition moved slowly at first, certain steps were taken. 
Among them was the decision to adapt the public monopoly regu- 
lation to the standards of the EEA. In November 1991, the last 
foreign-exchange controls were lifted, thus opening the economy 
further to foreign competition in financial services and liberaliz- 
ing cross-border financial transactions. The new Stock Exchange 
Act of 1989 was designed to increase openness and flexibility. 

The most difficult objective of structural reform was reducing 
government subsidies. Some success was achieved between 1987 
and 1990, when federal subsidies as a percentage of GDP fell from 
2.2 percent to 1.9 percent and when general government subsidies 



128 



The Economy 



dropped from 2.9 percent to 2.4 percent. But questions arose as 
to whether progress of this kind could be continued. 

Nonetheless, the government was able to enact a major reform 
in the tax system in 1989. The reform entailed gross tax reduc- 
tions of about S45 billion. It lowered personal income tax sched- 
ules, reducing the top rate from 62 to 50 percent and the lower 
rate from 21 to 10 percent, while widening the tax base. The re- 
form also abolished the progressive corporate tax schedule and 
adopted the earlier 30 percent bottom rate as the standard corporate 
tax rate (compared with the earlier top rate of 55 percent). The 
tax reform raised incentives and spurred growth. 

European integration played a central role in the drive toward 
structural reform of the Austrian economy. The EEA treaty's pro- 
visions on regulation and liberalization forced far-reaching changes 
in the form of increased economic opportunities and competition. 
It also forced the removal of many barriers that had sheltered im- 
portant sectors from international competition, especially nontariff 
barriers. 

Importantly, unit labor costs — which had almost doubled dur- 
ing the 1970s — held steady throughout much of the 1980s, peak- 
ing in 1987 when the new reforms were announced. By the end 
of the 1980s, lower labor costs had improved the competitive posi- 
tion of Austrian exporters to a level they had not enjoyed for some 
time. Wages and salaries per unit of output, which had risen steadily 
from a scale of 100.0 in 1970 to a scale of 205.9 by 1982, rose only 
gradually to 216.3 in 1987 and then declined to 208.2 in 1990. 

Austria's economic environment changed dramatically during 
the late 1980s and early 1990s with the opening of the Iron Cur- 
tain. Many of the trade agreements that Austria had made with 
formerly communist states behind the Iron Curtain suddenly be- 
came null and void, opening new opportunities but also requiring 
Austrian resources to help invest in those states as well as to offer 
credit in order to finance exports. In addition, Austria lost some 
export markets because the German economy registered a sharp 
decline in the early 1990s as the cost of German unification had 
to be financed largely by debt and as the German central bank (the 
Bundesbank) began raising interest rates to reduce the risk of in- 
flation. 

The loss of export markets affected Austria adversely, as did the 
spillover effect of high German interest rates on Austria's own in- 
terest rates. GDP growth fell from 4.6 percent in 1990 to a level 
of only 2.0 percent in 1992 and was expected to decline further. 
Unemployment rose, especially among foreign workers. Although 
it appears likely that the recession will not be as long as that of 



129 



Austria: A Country Study 

the early 1980s, the slump again shows that Austria remains tied 
to developments in neighboring countries and cannot rely entirely 
on its own resources and policies in an uncertain global en- 
vironment. 

The Magic Pentagon 

The Austrian government and Austrian economic institutes and 
analysts have long evaluated the country's economic policies and 
general economic situation on the basis of five standards, which 
are termed the magic pentagon: keeping the GDP growth rate as high 
as possible; maintaining the current account balance as high as pos- 
sible; keeping employment as high as possible; holding down the 
inflation rate as much as possible; and keeping the government 
deficit as low as possible. The objective of government policies is 
to keep some of these measures as high as possible and some as 
low as possible. Austrian statistics sometimes show the five differ- 
ent objectives as five arrows emanating from a central core, with 
lines connecting the current statistics on each of those arrows so 
that they form a pentagon. The purpose of government policy is 
to make the pentagon as large as possible, recognizing that there 
might at times be some required trade-offs among the different ob- 
jectives. 

One of the most important elements in the policy mix is a deter- 
mination to combat inflation — not an easy task, especially given 
the significant fiscal deficits during parts of the 1970s and 1980s. 
To fight inflation and keep the schilling strong and stable, the 
government relies heavily on attaching the schilling to the deutsche 
mark and following the policies of the German Bundesbank. These 
practices, on the whole, have kept inflation at acceptable levels. 
Low inflation has tended to reduce the demands for higher wages. 
Consumer price increases held steady around the late 1980s but 
crept up in the early 1990s to 3.3 percent. Producer prices increased 
at a slower rate, but wages rose even faster. As a result of the govern- 
ment's policy, Austria has had one of the lowest inflation rates in 
Europe, and the schilling has consistently been one of Europe's 
strongest currencies. 

The Subsidy Policy 

Austrian federal subsidies, both direct and indirect, stabilized 
as a share of GDP during the late 1980s. Direct subsidies were es- 
timated to average about 0.4 percent of GDP, and indirect subsi- 
dies were estimated at about 1.3 percent of GDP. The subsidies 
began changing during the late 1980s from generally defensive sub- 
sidies intended to preserve traditional industries to more specifically 



130 



The Liebherr plant at Bischofshofen in the province of Salzburg produces 

high-quality industrial equipment. 
The General Motors plant outside Vienna 
Courtesy Luftreportagen Hausmann, Vienna, and ICD Austria, New York 



131 



Austria: A Country Study 

targeted programs such as special subsidies for research and de- 
velopment, innovation, and environmental protection. The Inno- 
vation and Technology Fund was established, and in 1989 the 
government conducted a special review to reduce subsidies to cer- 
tain traditional industries and to tourism. 

Agricultural subsidies were well below the EC average during 
the late 1970s, but they rose during most of the 1980s. By the end 
of the decade, they had reached a level slightiy above the EC aver- 
age. In addition, the government subsidized investment and debt 
service for nationalized industries and covered occasional losses for 
those industries. 

To reduce the burden of the nationalized companies on the state 
budget, the government began a systematic effort to privatize its 
share in those companies in the late 1980s. Some of the privatiza- 
tion efforts included the sale of the mint to the partially privately 
owned Nationalbank. The government's share in Austrian Airlines 
was reduced to a small majority ownership, and 49 percent of the 
state electricity company was sold. The federal government's share 
in the Creditanstalt-Bankverein and the Osterreichische Lander- 
bank was reduced to 51 percent. In other instances, however, 
privatization took place through the sale of state assets to other 
government-owned or government-directed organizations, rather 
than to the private sector. For this reason, the program did not 
generate as much income as originally anticipated. 

The level of regulation and subsidization, combined with the sig- 
nificant national ownership of major industries, makes production 
and consumption costs high. On average, consumer prices in Aus- 
tria are between 10 and 20 percent higher than in European Union 
(EU — see Glossary) member states. They are even higher than in 
Germany, which is also noted for its high prices. Direct compari- 
sons indicate that productivity in Austria is lower than in Germa- 
ny but that markups for consumer retail sales and profit margins 
in the distribution system are higher. 

These figures raise a number of important questions for Austrian 
economic planners as they prepare for the economic unification 
of Europe after the collapse of the Soviet Union's satellite system. 
The competitive pressures against Austrian producers and work- 
ers will likely increase in a widened EU, especially if states having 
low costs, such as those of Eastern Europe, are admitted. 

Foreign Workers in Austria 

One of the constant factors on the Austrian manufacturing scene 
since the 1960s has been the employment of foreign workers. Some 
of them were refugees from Eastern Europe who chose to remain 



132 



The Economy 



in Austria and were permitted to do so. Others were from Turkey 
or farther away. In 1973 the number of foreign workers had reached 
some 227,000, or about 8.7 percent of the work force. After that, 
as Austria's own boom began to slow after the first "oil shock" 
and the global slowdown during the mid-1970s, the Austrian 
government began reducing the number of foreign workers to pro- 
tect the positions of Austrian workers. In 1978 the number of for- 
eign workers had been reduced to about 177,000. In the 1980s, 
the number had dropped to approximately 140,000 to 150,000, or 
about 5 to 6 percent of the labor force. As in other West European 
countries, foreign workers in Austria performed and continue to 
perform many tasks not wanted by Austrian workers. 

The number of foreign workers began rising rapidly in 1989, 
as the borders with Eastern Europe became more porous, and 
almost doubled by 1990. The number of foreign workers actually 
peaked during the middle of 1991 at about 280,000, or more than 
8 percent of the work force. The Austrian government began tak- 
ing vigorous border-control and administrative measures in order 
to prevent further entry of these workers into the labor force. The 
number began dropping during the last several months of 1991, 
as it had during the 1970s when the government intervened, but 
there was no certainty that the government would be as successful 
during the 1990s as it had been during the 1970s because of the 
more open borders between Eastern and Western Europe. What 
was more probable was that the rise in Austrian unemployment 
during the early 1990s, as a result of the Austrian recession, would 
reduce the number of foreign workers. The unemployment rate 
among those workers is higher than among native Austrians. 
Although certain elements of the Austrian economy, especially 
hotels and restaurants, cannot function without foreign workers, 
many Austrians resent the employment of foreigners when many 
Austrians are without work (see Attitudes Toward Minorities, 
ch. 2). 

Principal Economic Interest Groups 

The major participants in the Austrian economy are represented 
in national economic policy determination by a number of official 
and voluntary organizations. The most important of these are the 
chambers of commerce, agriculture, and labor. These are public 
corporations legally responsible for the representation of the in- 
terests of their constituent groups. Because of their legal and offi- 
cial status, membership in the chambers is compulsory for all 
enterprises, farmers, and wage and salary earners. There are also 
specialized chambers in various professional fields and in some 



133 



Austria: A Country Study 

provinces for agricultural workers, although these chambers are 
not as important in the operation of the economy. 

The chambers function as semipublic bodies with broad respon- 
sibilities. For example, before the government can present any draft 
legislation to parliament, the bill must be sent for appraisal by the 
chambers. The chambers are organized so that they fully represent 
each of the appropriate professional and other groups involved in 
their particular sector of the economy. Because of Austria's rela- 
tively small size, the chambers constitute instruments for contact 
and exchange of information at every level of the economy. There- 
fore, they function not only as pressure groups from the outer 
reaches of the economy toward the center but also as communica- 
tion belts that relay the decisions from the center to the regions. 

Several other important voluntary organizations also play signifi- 
cant roles in economic policy decisions. These include the Austrian 
Trade Union Federation (Osterreichischer Gewerkschaftsbund — 
OGB), an umbrella organization representing labor; the works 
councils that represent labor in enterprises; and the Federation of 
Austrian Industrialists (Vereinigung Osterreichischer Industri- 
eller — VOI), representing management. 

The Chambers of Commerce 

Originally established under the Habsburg Empire in 1848, the 
modern chambers of commerce operate under legislation passed 
in 1946. They serve as the legal representatives of all persons en- 
gaged in crafts (small-scale production), industry, commerce, 
finance (banking, credit, and insurance), transportation, and 
tourism. Each of these six functional activities is handled by a 
separate section within the nine provincial chambers and in the 
parent body, the Federal Chamber of Trade and Commerce, com- 
monly referred to as the Federal Economic Chamber (Bundeswirt- 
schaftskammer). The most important functions of the chambers 
arise from their authority to interpret laws and regulations affect- 
ing the interests of their members and from their right to advise 
the Nationalrat (National Council) and review draft legislation. 

The Chambers of Agriculture 

The chambers of agriculture are the principal bodies represent- 
ing agricultural interests. There is no federal body comparable 
to the Federal Economic Chamber, but the Conference of Presi- 
dents of the Chambers of Agriculture is the de facto represen- 
tative of the nine provincial chambers in all matters undertaken 
at the national level. The provincial chambers, in addition to their 



134 



The Economy 



representational role, function at the local level to modernize and 
promote agricultural production. 

The Chambers of Labor 

The chambers of labor, which are public corporations, differ from 
the labor unions, which are private voluntary organizations, prin- 
cipally in their official character. They were legally established in 
1920 to give labor what employers had had since 1848 in the cham- 
bers of commerce and thereby to provide labor with a representa- 
tive voice in the preparation of legislation affecting employees' 
social, economic, vocational, and cultural interests. The principal 
governmental function of the chambers is to advise on draft legis- 
lation and administrative regulations directly or indirectly affect- 
ing labor. Thus, the fields in which they are concerned can include 
food supply, public health, tariffs and trade, use of leisure time, 
adult education, employer-employee relations, job safety, social in- 
surance, and the labor market. 

Labor, like agriculture, has no chamber at the federal level. The 
Vienna chamber, however, carries out most of the federal-level func- 
tions and maintains a general secretariat for the Chamber of Labor 
Conference (Arbeitskammertag). This body consists of a large staff 
of experts having advisory roles in economic policy, statistics, law, 
and consumer protection. 

The Professions 

The Regulation of the Professions (Gewerbeordnung) plays as 
important a role as do the chambers . The term Gewerbe, which can 
theoretically mean any kind of economic activity except large-scale 
production and services, is a concept that descended to modern 
Austria from the medieval system of crafts, guilds, and services. 
The term has no English equivalent but can best be described as 
the exercise of a particular profession or economic activity. 

The Gewerbeordnung is a system of regulations that ensures a 
profession is exercised in a prescribed manner. The system, which 
regulates about 220 forms of economic activity, establishes stan- 
dards covering the following: entry into a profession; operating 
regulations; methods for limiting price competition; rules govern- 
ing permissible advertisement; exclusive franchises and licenses; 
shop-opening and price competition rules; market access controls; 
capital requirements; and local monopolies. In a variety of instances, 
the rules also provide for exemption from cartel law regulations 
(although the cartel law does not prohibit cartels but their abuse). 
Firms covered by these and similar regulations account for about 
40 percent of total value added and investment in Austria and 45 



135 



Austria: A Country Study 

percent of total employment. These firms are involved in such mat- 
ters as professional services, wholesale and retail trade, insurance, 
banking, capital services, telecommunications, energy, and trans- 
portation. 

The effect of the rules is to reduce competition in certain fields 
and to shelter those already admitted in these fields from excessive 
access as well as predatory practices by others, especially by larger 
firms. In a small country such as Austria, with many small vil- 
lages and communities, the system serves largely to preserve the 
existing structure of economic activity and the position of local ser- 
vice providers who were established first in a community. It also 
protects consumers and others against fraudulent or unqualified 
service providers. 

The chambers are the principal instruments that obtain protec- 
tion or other forms of sheltered operation, largely because the cham- 
bers participate actively in the political process and are in the best 
position to make group or sector concerns felt at the national or 
provincial level. Some of these arrangements, such as sectoral sup- 
port programs for transportation, mining, cement, or paper, are still 
in effect, while others, such as those for textiles, clothing, leather, 
and paper, have been abolished. 

The Austrian Trade Union Federation 

Although union membership is not compulsory, about three-fifths 
of employed persons belong to one of the fifteen major labor un- 
ions. These fifteen unions constitute the Austrian Trade Union Fed- 
eration (Osterreichischer Gewerkschaftsbund — OGB). The total 
membership of the OGB was more than 1 .6 million persons at the 
end of 1991. 

The fifteen unions making up the federation represent four major 
groups: nine unions represent skilled and unskilled workers orga- 
nized by industry, including farm and forestry workers; four unions 
represent public employees, including transport and communica- 
tions workers; one union serves the arts and professions; and another 
union, the second largest in membership, represents private white- 
collar salaried employees. Because the latter is the only union not 
organized on industry lines, all wage earners in an enterprise or- 
dinarily belong to the same union. The smallest union, the Union 
of Arts, Journalism, and Professions, had 16,310 registered mem- 
bers in 1989. In the same year, the largest union, the Union of 
Commercial, Clerical, and Technical Employees, had 340,348 
registered members. 



136 



The Economy 



Works Councils 

In addition to the trade unions, and theoretically separate from 
them, are the works councils, which exist at the plant level as the 
elected representatives of all plant employees, whether or not they 
are union members. According to law, the works councils look af- 
ter the economic, social, health, and cultural interests of employees. 
This, in practice, means involvement in matters of discipline, safety, 
sanitation, dismissal, and transfer, as well as the handling of griev- 
ances and the implementation of collective bargaining agreements. 
Works councils in corporations also have a voice in management, 
electing two members to the corporate board of directors with all 
the rights and duties of other directors. 

Although these various bodies representing labor are theoreti- 
cally separate, they work closely together, not only because of over- 
lapping interests and responsibilities but also because labor leaders 
tend to be functionaries of both the unions and the chambers. At 
higher levels, they are frequently members of parliament as well. 
At lower levels, the elected members of the works councils in the 
plants are almost invariably union members and are usually union 
officials as well. 

Despite an apparent superfluity of bodies representing the in- 
terests of labor, the division of primary responsibilities between 
them is fairly clear. The chambers represent a worker's interest 
on the economic policy level, the works councils are concerned with 
a worker's everyday interest at the plant level, and the unions serve 
primarily as collective bargaining agents. In this function, a specific 
union usually conducts the actual negotiations, and the OGB has 
the ultimate power of approval and reserves for itself the negotiat- 
ing authority for agreements that pertain to all employed persons. 

The Federation of Austrian Industrialists 

The principal private- sector organization is the Federation of Aus- 
trian Industrialists (Vereinigung Osterreichischer Industrieller — 
VOI), founded in 1941. In the late 1980s, its membership consist- 
ed of about 2,400 firms employing about 420,000 persons. Although 
the VOI does not have the legal status of the Federal Economic 
Chamber, it occupies one of that chamber's two seats on the So- 
cial and Economic Affairs Committee of the Parity Commission 
for Prices and Wages (commonly known as the Parity Commis- 
sion). Because the VOI represents the interests of most large-scale 
private-sector industry, it essentially controls the industry sector 
of the Federal Economic Chamber. It also deals directly on behalf 



137 



Austria: A Country Study 

of its members with the appropriate ministries and committees of 
the Nationalrat. Like the chambers, the VOI submits recommen- 
dations on proposed legislation. It is also active in handling relations 
between domestic industries and foreign industrial associations. 

Social Partnership 

After World War II, the government, as well as industry and 
the trade unions, realized that the country could not afford to repeat 
the continuous social, political, and economic conflict that marked 
the 1920s and 1930s, when the country moved from one crisis to 
another until Adolf Hitler's Anschluss in 1938. They wanted to 
avoid ruinous social and industrial conflict, strikes, lockouts, and 
the kind of persistent social battles that had contributed to the paral- 
ysis of the Austrian economy and its body politic during the inter- 
war years. 

To find a solution, the government and its political and economic 
institutions reached back to earlier concepts that also had an in- 
fluence on Austrian thinking and Austrian history. One was the 
papal encyclical Rerum Novarum of 1 89 1 , which had envisaged a 
working class that would be gradually absorbed into a property- 
owning class, not through social conflict but through constructive 
social cooperation. Another was the Austrian tradition of the Labor 
Advisory Council (Arbeitsbeirat), which had functioned as a sec- 
tion of the Ministry for Commerce from 1898 to the outbreak of 
World War I and which offered a model for the pragmatic partici- 
pation of the labor movement in the functions of the state and the 
general direction of the economy. 

After World War II, these concepts coincided with the practical 
exigencies of the moment to force representatives of social groups 
to work together to cope with the combination of unemployment, 
inflation, and widespread poverty and misery. The OGB and the 
reestablished business organizations of the three main economic 
chambers played central roles in working out a series of wage-price 
agreements between 1947 and 1951. Those agreements, and the 
negotiations that led to them, were based on a mutual recognition 
that no social group could benefit if it imposed its demands at the 
expense of the collapse of the state and its economy — a collapse 
that often seemed all too near in the immediate postwar years. 

The social partnership system works on the basis of a mutual 
recognition of three principles. The first is that the three main eco- 
nomic groups — industry, agriculture, and labor — will be properly 
represented through four mutually recognized organizations — the 
chambers of commerce, agriculture, and labor, and the OGB — 
that represent their interests and that can take the responsibility 



138 



The Economy 



for decisions. The second is that economic decisions can be legiti- 
mately made outside the ideologically competitive political at- 
mosphere of parliament, thus in effect depoliticizing crucial matters 
related to the Austrian standard of living. Third, the principle of 
consensus will function in such a manner that no social group is 
ignored, and no social group will prolong the struggle once an agree- 
ment has been reached. 

The core consultative instrument of the social partnership is the 
Parity Commission. The commission consists of seven members 
of the government — the chancellor, three ministers, and three state 
secretaries — and two representatives each from the Federal Cham- 
ber of the Economy, the Presidential Conference of the Austrian 
Chambers of Agriculture, the Council of the Austrian Chambers 
of Labor, and the OGB. This distribution of seats on the commis- 
sion gives the interest organizations a majority. Experts in vari- 
ous areas attend the meetings in an advisory capacity. The Parity 
Commission's decisions must be unanimous, because the commis- 
sion is not based on law, and participation is completely voluntary. 

The Parity Commission began its work in 1957 on the basis of 
an exchange of letters between the president of the Federal Cham- 
ber of the Economy and the president of the OGB . Its original pur- 
pose was to slow down a troubling wage-price spiral, but it later 
expanded into much broader discussions on the general trends of 
the European and Austrian economies and what would be the best 
response to these trends. The commission has subcommittees on 
wages and prices. In addition, the commission includes the Advi- 
sory Committee for Economic and Social Questions, which was 
established in 1963 to provide the basis for an objective approach 
to economic policy and to conduct studies required by the Parity 
Commission. 

The Parity Commission, however, only deals with the central 
questions of the economy. It establishes the general principles for 
solving economic problems and disagreements. Below it, at the in- 
dustry level, the interest-group associations of the various cham- 
bers or the trade unions negotiate the separate and legally binding 
agreements governing employers or employees. The agreements 
are reached on the basis of the broad principles and criteria set 
by the Parity Commission. 

Some forms of social partnership involve little or no participa- 
tion of government organs. The so-called self-administration as- 
sociations require the cooperation of interest associations in such 
structures as social insurance institutions, agricultural boards, labor- 
market bodies and tribunals, and in other institutions where agree- 
ments between potentially conflicting interest groups must be 



139 



Austria: A Country Study 

reached. Those institutions more often deal with social than with 
economic questions, but the participants in the negotiations usually 
evaluate the broad economic situation and the policies agreed on 
in the Parity Commission as they negotiate. 

Beyond the mechanics of the Parity Commission and the bitter 
memories of futile class conflict, however, other elements also work 
to produce an atmosphere of cooperative consciousness. One of 
these elements is the virtually universal recognition by all Austri- 
ans that theirs is a small state and a small economy in a world full 
of larger and potentially more competitive actors. Austria cannot 
afford self-indulgence because it would immediately risk its survival. 

Another cause for cooperation rather than unbridled competi- 
tion is the large public and foreign ownership of Austrian firms. 
At the beginning of the 1990s, state-owned firms constituted a to- 
tal of 32.8 percent of all Austrian companies, and foreign-owned 
firms constituted an additional 25.1 percent, leaving only about 
35 percent in private hands, with an additional 7 percent in scat- 
tered holdings. 

The Austrian trade union movement is forced to moderate its 
demands for wage increases because of the close affiliation between 
the Austrian schilling and the German deutsche mark. The stabil- 
ity policy of the German Bundesbank thus also has an effect in Aus- 
tria. Given this fact, the trade unions cannot usually argue that 
runaway inflation threatens the standard of living of the Austrian 
worker. 

The social partnership has been successful in maintaining a 
cooperative spirit and in avoiding industrial strife. After World War 
II, for example, Austria had fewer strike-minutes lost per worker 
than any major economy. In many years, no strikes have occurred 
at all. However, there has been debate about whether the social 
partnership and the work of the Parity Commission and other bodies 
have impeded progress and if stability could become stagnation. 
The danger exists that new production and communications sys- 
tems, as well as progressive organizational structures, will not be 
introduced quickly and that the social partners will find it convenient 
to protect established jobs and processes rather than to revise or 
even revolutionize them. 

Structure of the Economy 

Like other industrial societies, Austria found its agricultural and 
industrial sectors declining as the services sector expanded (see ta- 
ble 9 , Appendix) . The change in the relative importance of the sec- 
tors was most pronounced during the 1970s. Changes in the 1980s 
continued earlier trends. Whereas services and industry had nearly 



140 



A railroad car manufactured by Jenbacher Werke 
Courtesy Austrian Federal Economic Chamber, Vienna 

equal shares of GDP in 1970, by 1990 industry's share was less 
than half that of services. Agriculture's share has declined steadily, 
so that by 1990 it was no longer significant economically but still 
had social importance (see The Agricultural Sector, this ch.). 

Employment trends have followed shifts in the relative impor- 
tance of the three sectors (see table 10, Appendix). Agriculture's 
share of employment fell by more than half between 1970 and 1990. 
Industry employed about 47 percent of the work force in the late 



141 



Austria: A Country Study 

1960s and 37 percent in the late 1980s. The services sector em- 
ployed roughly the same portion of the work force as industry in 
the late 1960s but by the late 1980s employed nearly 60 percent 
of the work force. 

Despite the increasingly powerful role played by the services sec- 
tor, however, most of the major firms remain in industrial produc- 
tion. Services, like agriculture, are usually performed locally and 
by medium- or small-sized firms. Thus, a listing of Austria's twenty 
largest firms in 1991 showed mainly industrial companies, with 
the exception of such state-owned firms as railroad and postal agen- 
cies and several large retail organizations. 

Most Austrian firms are small. An analysis of nonagricultural 
concerns in 1988 showed that well over half the nonfarm labor force 
was employed by firms with fewer than 100 employees. About 
500,000 Austrians worked in medium-sized firms having between 
100 and 499 employees, and only 140 firms had more than 1,000 
employees. 

The largest single enterprise in Austria is Austrian Industries, 
a holding company created in 1987 to take over and manage the 
assets that had been nationalized by the Austrian state after World 
War II. An enterprise of about 75,000 employees, in 1993 it was 
divided into four branches that respectively managed the steel, met- 
al, petroleum, and diversified operations of the company. The latter 
includes mining and the manufacture of various kinds of machinery, 
as well as other less easily classifiable activities of the holding com- 
pany. As intended, it has moved vigorously to become a competi- 
tive enterprise despite its nationalized origins, discarding some 
unprofitable activities and investing abroad or in Austria in other 
areas of activity. 

The ten largest Austrian enterprises in the early 1990s, based 
on turnover, were Austrian Industries, Osterreichische Post/ 
Telegrafenverwaltung (national postal service), VOEST- Alpine 
(steel), Osterreichische Mineral olverwaltung (OMV) (petroleum 
and other mineral resources), Konsum Osterreich (KO) (retail 
trade), Osterreichische Bundesbahnen (Austrian Federal Rail- 
road), Porsche Holding (vehicles), AL Technologies (diversified), 
Billa (trade), and Austria Tabakwerke (national tobacco monopo- 
ly). Of these enterprises, three are subsidiaries of Austrian Indus- 
tries, two are state public- service monopolies, and the remainder 
are owned either by foreigners or by small share holder-members 
(such as the retail trade firm KO). None of these businesses ex- 
cept Austrian Industries has played a significant international role. 

With the exception of Austrian Industries, even Austria's largest 
companies are small on an international scale. Only four Austrian 



142 



The Economy 



companies were listed in the Financial Times "European 500" for 
1992. Two were banks, the Creditanstalt-Bankverein (number 215 
on the list) and Bank Austria (275). The third was OMV(288), 
the mineral and oil exploration and exploitation arm of Austrian 
Industries. The fourth was a construction company, Wienerberger 
Baustoffindustrie (318). Austrian Industries was not listed because 
it is not a private company. If it had been listed, it would proba- 
bly have been among the top fifty. 

Austria has never had a great entrepreneur-capitalist tradition. 
Many firms function within the Austrian market or within regions. 
In part because of the bitter experiences of inflation and the depres- 
sion between the world wars, most Austrians do not attempt risky 
ventures but instead concentrate on geographic areas or on specific 
products where success is fairly certain. One of the challenges fac- 
ing Austrian enterprises as they move into the European Economic 
Area (EEA) and into the European Union (EU) Single Market will 
be competing effectively against the giant firms that operate 
throughout Europe and have many more resources than virtually 
any Austrian firm could hope to command. 

The Agricultural Sector 

Although agriculture's share of the economy declined steadily 
after World War II, agriculture continues to represent an impor- 
tant element of the economy because of its social and political sig- 
nificance. The Chamber of Agriculture remains on an equal level 
with the chambers of commerce and labor, although its members 
produce only a fraction of the GDP that industrial and commer- 
cial workers produce. 

The Government Role 

In Austria, as in most other Western countries, the government 
has played an important role in agriculture since the end of War 
World II. The government has concentrated on mitigating social, 
regional, economic, and even environmental consequences of the 
sector's decline, as well as delaying the decline itself. 

Agricultural policy has been carried out with different objectives 
and with different laws and policies depending on the times. In 
the early postwar years, the most important objectives were sur- 
vival and self-sufficiency. As a poor country, Austria needed to 
be able to feed itself if its population was to survive. 

By the 1950s, however, the policy was changing to a more global 
perspective, while keeping intact the traditional farm economy. The 
government wanted to protect domestic production, stabilize 
agricultural markets, protect farmers' incomes, and improve the 



143 



Austria: A Country Study 

sector's ability to compete in Austria and abroad. Increasingly, 
the government began to believe in the importance of maintain- 
ing rural society as an objective in its own right, for social rea- 
sons, and to protect the environment and encourage tourism. 
Because of these aims, agricultural policy, more than any other 
economic policy, reflects a mixture of economic and noneconomic 
objectives and concerns. The principal aim, however, is to preserve 
the existing number of farms as much as possible. 

Within the structure of the social partnership, various organi- 
zations work to maintain farm incomes and thus farm existence, 
among them the Grain Board, the Dairy Board, and the Livestock 
and Meat Commission. These organizations set basic support 
prices, taking into account domestic costs and local supply and de- 
mand, with only weak linkages to world market prices. 

The boards and commission use a variety of measures to achieve 
their broad purposes. Among these measures are import restric- 
tions, such as border controls and entry controls — some of which 
may be bilaterally negotiated — and variable import duties. 

If import restrictions are not sufficient to maintain prices be- 
cause of excess production, the surplus is exported at subsidized 
prices (with the subsidies usually coming from federal or provin- 
cial authorities). Authorities also apply production controls, such 
as sales quotas or limits, on the size and density of livestock hold- 
ings. Quotas exist for many different products, with the quotas 
usually fixed on the basis of past production. Price and quality con- 
trols and limits also exist, especially with respect to different prices 
for different grades of wheat or milk. The government can also 
pay direct income supplements, but these payments are generally 
restricted to certain mountain farming zones and other equally dis- 
advantaged areas. Subsidies are mainly paid by the federal govern- 
ment but may in some instances be paid by provincial governments. 

Because of the complex system of price supports and market 
access limitations, the exact share of subsidy costs to the govern- 
ment and to consumers is virtually impossible to calculate. Experts 
estimate that the total cost to the federal and other governments 
for agricultural and forestry support during the late 1980s was 
approximately S16 billion a year, a level that would have been 
roughly at the same level as that of many other Organisation for 
Economic Co-operation and Development (OECD) governments 
but slightly higher than the EC average. 

The economic research institute Osterreichisches Institut fur 
Wirtschaftsforschung (WIFO) estimated after a major 1989 study 
that about 7 1 percent of the cost of agricultural support was borne 
by consumers in the form of higher prices, with the taxpayers 



144 



The Economy 



carrying the remaining 29 percent through such different programs 
as direct and indirect federal and provincial subsidies or various 
kinds of market regulation. 

Austria's decision to enter the EU will have certain effects on 
its agriculture and forestry. Support prices in Austria are higher 
than those set under the EU's Common Agricultural Policy (CAP), 
although the two systems are in many ways similar. Austrian 
government-borne subsidy costs are at about the same level as those 
in the EU, but consumer-borne subsidy costs are higher, so that 
food prices in Austria average about 30 percent higher than those 
in the EU. Full integration into the EU will thus compel a num- 
ber of adjustments in Austria. These adjustments may be even more 
severe if they become effective at the same time that some East 
European countries with lower production costs enter the EU. Much 
depends, of course, on any reforms that may take place in the CAP. 

The Structure of Agriculture 

Despite the government's efforts to sustain agriculture, by 1991 
not one province had as much as 10 percent of the population in- 
volved in agriculture and forestry. At the beginning of the 1970s, 
all but two provinces (Vienna and Vorarlberg) had more than 10 
percent of their populations involved in farming. This contrasted 
markedly to the situation in 1934, when all but those same two 
provinces had more than 30 percent of their populations working 
in agriculture. Over this period of two generations, the decline in 
the Austrian farm population was as fast as any in the Western 
world. 

Of Austria's total area of almost 84,000 square kilometers, about 
67,000 square kilometers are used for farming and forestry. Roughly 
half of that area is forest, and the remainder is arable land and 
pasture. 

Agriculture and forestry accounted for about 280,000 enterprises 
in 1986, with the average holding being about twenty-three hect- 
ares. There were about 4,500 corporate farms. Beyond those farms, 
however, only a third of all farmers were full-time farmers or farm- 
ing companies. Over half the farming enterprises were smaller than 
ten hectares; nearly 40 percent were smaller than five hectares. Just 
as the number of farmers has long been in decline, so also has been 
the number of farms. 

Family labor predominates, especially in mountainous areas and 
on smaller farms. Only a third of all farm and forestry enterprises 
were classified as full-time occupations in 1986. A full half of these 
enterprises are spare-time, that is, less than half of household labor 
is devoted to farming or forestry. The remainder are part-time. 



145 



Austria: A Country Study 

Farms up to ten hectares are more often tended by part-time and 
spare-time farmers rather than by full-time farmers. For most farm 
owners and workers, nonfarm income is as important as, if not 
more important than, farm income. 

Despite the decline in the number of farmers and agriculture's 
share of GDP since 1960, agricultural output has risen. As of the 
early 1990s, Austria was self-sufficient in all cereals and milk 
products as well as in red meat. This gain was achieved because 
of the considerable gains in agricultural labor productivity. 

The value of agricultural and forestry output is heavily concen- 
trated in field crops, meat, and dairy products, with most of it com- 
ing from animal husbandry. Because large parts of Austria are 
mountainous, only the lowland areas of eastern Austria and some 
smaller flat portions of western and northern Austria are suitable 
for crop production and more intensive forms of animal husband- 
ry. The remainder of the land is used for forestry and less inten- 
sive animal husbandry, most of which takes advantage of mountain 
pasturage. 

The industrial Sector 

Industry 

Industry in Austria is diverse but consists mainly of traditional 
industries of the second industrial revolution. It is concentrated 
in various processing industries, each of which has long special- 
ized in its particular sector and had often gained a global reputa- 
tion for high standards of production and service. 

Industry exists throughout the country. Textile production 
represents the principal industrial activity of the mountainous west, 
whereas machinery production occurs principally in the east, as 
does production of glass, electrical goods, and chemicals (see fig. 
9). Heavy industry tends to be located around Vienna and in several 
central river corridors. Iron and steel production is concentrated 
around Linz and Leoben. 

Although industrial production is an important component of 
GDP, most companies are small and privately owned. Almost half 
employ fewer than five workers. The larger companies are often 
state-owned, either directly or through Austrian Industries (see 
Structure of the Economy, this ch.). 

The metals industries, both production and related manufactur- 
ing, accounted for 43. 1 percent of industrial value added in 1991 . 
Chemicals were the second most important segment with 12.6 per- 
cent, followed by foods and beverages with 11.8 percent; forest 
products and paper with 11.6 percent; textiles, leather, and clothing 



146 



The Economy 



with 7.7 percent; glass, pottery, and quarrying with 5.3 percent; 
mining with 4.7 percent; and petrochemicals with 3.2 percent. 

Iron and steel are largely produced by Vereinigte Osterreichische 
Eisen- und Stahlwerke (United Austrian Iron and Steel Works), 
commonly known as VOEST- Alpine, one of the major components 
of Austrian Industries. The company pioneered a worldwide steel 
production method named the LD process (after the Austrian ci- 
ties of Linz and Donawitz, where it was developed). Iron and steel 
production in turn formed the basis for other industries, such as 
mechanical engineering, machine tools, vehicle production, pow- 
der metallurgy, factory engineering and construction, and automo- 
bile components. 

Chemicals and petrochemicals constitute another major indus- 
try, producing such items as synthetic textile fibers, pesticides, 
pharmaceuticals, plastics, and a wide range of fuels. Electrical en- 
gineering is another important component of Austria's industry 
and specializes in the production of precision and optical equip- 
ment and generators. Food also constitutes an important indus- 
try, ranging from milk produced in the mountains of western 
Austria to Viennese pastries. 

Efforts to Improve Competitiveness 

Like many other countries that had concentrated on industrial 
production and where industrial value added constituted an im- 
portant element of national production as well as of national ex- 
ports, Austria had to reevaluate its performance during the 1980s. 
The government commissioned a special report on the need for 
structural adjustment, and a number of steps were taken to make 
Austria more competitive worldwide. 

Steps to increase competitiveness include privatization, greater 
incentives for research, and greater readiness to make decisions 
about curtailing subsidies where they are not warranted (especial- 
ly for nationalized industries) and could drain resources from other 
potentially more competitive industries. Although industrial sub- 
sidies are harder to calculate than agricultural subsidies because 
of their greater range (from direct payments to accelerated depreci- 
ation allowances and the like), the government during the 1980s 
made special efforts to reduce those subsidies and encourage com- 
petitiveness. Some of these measures appear to have been at least 
in part effective, although they were not always carried out as fast 
as originally planned. 

Mining and Minerals 

Austria has unusually diverse mineral resources for a small 



147 



Austria: A Country Study 




148 



The Economy 



country. It is the world's largest producer of magnesite. There are 
also significant deposits of lignite and iron ore and smaller deposits 
of wolfram, antimony, gypsum, graphite (lower grade), dolomite, 
talcum, kaolin, quartz, and salt. Minerals are found throughout 
the country, but most significant deposits are in Styria or in north- 
eastern Austria. 

Mineral production accounted for only about 2 percent of GDP 
in 1990, having declined steadily in economic importance since 
World War II. However, it remains a significant source of income 
and employment in certain mountainous areas and in 1991 con- 
sisted of 109 firms employing about 6,700 persons. The principal 
mineral products in 1990 were lignite (2.4 million tons), iron and 
manganese (2.3 million tons), magnesite (2.0 million tons), gyp- 
sum (753,000 tons), and kaolin (474,000 tons). 

Energy 

Austria is highly dependent on foreign sources for energy. In 
the early 1990s, it imported more than four-fifths of the petrol- 
eum and petroleum products it needed, four-fifths of the natural 
gas, and two-thirds of the coal, coke, and briquettes. About two- 
thirds of Austria' s electricity is produced domestically from hydro- 
electric power plants, but most of the remainder is generated from 
imported fossil fuels. Despite extensive efforts to reduce power con- 
sumption after the first oil shock of 1973, Austrian reliance on for- 
eign sources of power rose from 61 percent in 1970 to 70 percent 
in 1991. Nearly all imported natural gas comes from Eastern Eu- 
rope, as does most imported coal. 

Policies adopted during the 1970s and 1980s to conserve energy 
and to use it more efficiently were to some degree successful. Be- 
fore 1973, for example, Austria's energy consumption exceeded 
the growth of its economy. In the 1973-90 period, however, the 
annual increase in energy consumption averaged only 0.8 percent 
while economic growth averaged about 2.4 percent a year. 

Energy policies also aimed at decreasing the country's reliance 
on oil and coal and at moving more toward renewable and/or clean- 
er sources. Whereas petroleum, petroleum products, and coal had 
supplied 73 percent of Austria's energy sources in 1970, by 1990 
their share had fallen to 57 percent, while the combined contribu- 
tion of natural gas and hydroelectric power rose from 23 to 34 
percent. 

Although real consumption of petroleum and petroleum products 
has declined, Austria still relies heavily on fossil fuels for energy. 
In 1991, of the energy consumed, 42 percent came from petrole- 
um and petroleum products, 20 percent from natural gas, and 16 



149 



Austria: A Country Study 

percent from coal. Electricity supplied only 13 percent of the coun- 
try's power, while wood, scrap, and other sources supplied the re- 
maining 9 percent. 

Austria has limited domestic reserves of oil and natural gas. 
Specialists believe that the entire region north of the Alps may be 
oil bearing. As of the early 1990s, however, proven deposits of oil 
and gas were found in Lower Austria, between Vienna and the 
northeastern border, and in Upper Austria between the Enns and 
Salzach rivers. Proven and probable oil reserves were estimated 
in 1992 at 15.0 million tons, while certain and probable gas reserves 
were put at 17.5 billion cubic meters. Certain and probable coal 
reserves were estimated at 69.9 million tons. 

The county's largest refinery, at Schwechat near Vienna, is oper- 
ated by the state-owned OMV and refines all the petroleum 
produced in Austria, as well as crude petroleum imported via a 
pipeline from Trieste, Italy. The state firm exploits deposits in 
eastern Austria, while a subsidiary of Mobil exploits deposits in 
western Austria. 

By the early 1990s, Austria obtained two-thirds of its electrical 
energy from hydroelectric power plants. Nearly all the remainder 
came from thermal power plants fired with fossil fuel. Total elec- 
tricity power production in 1991 was 45,000 gigawatt-hours, slightiy 
less than the amount of electricity consumed. During the 1980s, 
Austria had consistently been an exporter of electricity. By the early 
1990s, about two-thirds of Austria's hydroelectric power capacity 
had been harnessed. Austrians decided by referendum in 1978 not 
to generate power from nuclear fuels, although the country's cer- 
tain and probable uranium reserves were estimated at about 500 
tons (see Domestic Issues, ch. 1). 

The Services Sector 

Retail Trade 

In 1991 wholesale and retail trade accounted for about 12 per- 
cent of GDP and provided employment for 435,000 persons, or 
14.5 percent of the work force. Even in the early 1990s, retail trade 
was dominated by small shops, largely because of the many small 
towns and communities outside Vienna. In all, there were about 
17,000 wholesale concerns throughout Austria and about 33,000 
retail concerns. 

Despite the very large number of small firms in the sector, several 
retail and wholesale firms are among the twenty largest Austrian 
companies. Two of these are the grocery store chains Billa and Spar 
Osterreich. Another is Metro SB-Grosshandel, a wholesaler. 



150 



View of the Limber g 
Hydroelectric Power 
Plant in the province 
of Upper Austria 
A Drau River power plant in 
the province of Carinthia 
Courtesy Embassy of Austria, 
Washington 



Austria: A Country Study 

The country's largest retailer is the cooperative Konsum Oster- 
reich (KO), formed in 1978 from a number of smaller cooperative 
retailers. The company is the latest stage in the Austrian coopera- 
tive movement that dates from the mid- 1800s. In addition to hav- 
ing hundreds of stores throughout Austria, some of them quite large 
and selling many varieties of goods, KO is involved in manufac- 
turing some of the products it sells. By the late 1980s, the company 
employed about 20,000 persons, and more than 800,000 families 
were KO members. They received dividends each year and voted 
on KO's overall policies. In addition to KO, there are many other 
cooperatives involved in wholesale trade and in purchasing and 
marketing. In all, Austrians can shop at more than 1,000 cooper- 
ative retail stores. 

Transportation and Telecommunications 

Austria has a wide variety of transportation services and usage, 
reflecting the diversity of its geography and its central location in 
Europe (see fig. 10). Because of the mountainous topography, for 
decades scheduled nonlocal bus service carried almost twice as many 
passengers as rail service (288 million riders versus 168 million riders 
in 1990). Air transport is becoming more commonly used and car- 
ried 9.1 million passengers in 1992, more than twice as many as 
in 1982. Because of its central location, Austria is an important 
segment of the European railroad network, and a number of high- 
speed international trains pass through the country. The Brenner 
Pass has long been the main north-south route from Germany to 
Italy. The country's importance in east- west travel is also likely 
to increase in the 1990s with the opening of Eastern Europe. 

In the early 1990s, Austria's total railroad network amounted 
to approximately 6,028 kilometers, of which 5,388 kilometers were 
state owned. The standard- gauge (1.435 meter) network is 5,403 
kilometers in length, of which 3,051 kilometers are electrified. The 
number of electric trains increased during the 1980s, from 35,353 
in 1980 to 47,803 in 1992. The number of train passengers remained 
steady during the 1980s, amounting to 170 million in 1980 and 
175 million in 1992. 

The main railroad system is the state-owned and state-operated 
Osterreichische Bundesbahnen (Austrian Federal Railroad — OBB), 
which accounts for 90 percent of the country's rail routes. The re- 
mainder is managed by nineteen small privately owned railroads 
operating primarily narrow-gauge lines with a total length of about 
550 kilometers. The OBB is pursuing an extensive investment in 
modernization, the Neue Bahn (New Railroad) project. Major 
projects include the construction of a tunnel under the Alps that 



152 



The Economy 



would handle north-south traffic between Germany and Italy and 
greatly reduce the need to use the Brenner Pass. Freight opera- 
tions have been steadily modernized, especially with the greater 
use of pallets and rail-container transport. Austria is part of the 
European Transfer Express Freight Train System. 

As of the early 1990s, Austria had about 22,000 kilometers of 
paved roads. In 1992 there were 3.2 million private automobiles 
registered, compared with 2.3 million private automobiles in 1982. 
The increase in the number of trucks in Austria was not as great: 
269,000 trucks in 1992, compared with 193,000 in 1982. 

An increasing volume of freight is transported by truck. One- 
fourth of Austria's imports and one-half of its exports are carried 
by road. The growth of freight transported through Austria has 
increased greatly, going from 4 million tons in 1970 to 20 million 
tons in 1990. This traffic has begun to pose a threat to the coun- 
try's natural environment. Government regulations to counter this 
threat include limiting the size of international trucks traversing 
the country, most importantly those traveling between Germany 
and Italy and the Balkans via Alpine passes, especially the Bren- 
ner Pass. The government, with widespread popular support, is 
also seeking to have freight shipped on the less noisy and less pol- 
luting railroad system. Government regulations also limit trucks 
using Alpine passes at night to 7.5 tons. This ban has been ex- 
tended to other parts of country. 

Transit road traffic poses such a great threat to the environment 
that part of the agreement with the European Economic Area (EEA) 
provides for separate negotiations with Austria on traffic volume. 
An agreement reached in 1992 limited the volume of traffic and 
also provided for rules protecting Alpine areas. 

Austria's inland waterways total only about 350 kilometers. Of 
the country's rivers, only the Danube is navigable. Vienna has long 
been a major port on the Danube River. As of 1991, water trans- 
port brought in less than 10 percent of the amount of imports and 
exports transported by road or rail and accounted for only about 
5 percent of domestic long-distance freight. 

Water transport is likely to become more important in the fu- 
ture, with a related expansion of Vienna's role in river shipping 
because of the 1992 completion of the Rhine-Main-Danube Canal 
in Germany. The canal makes possible travel by boat from Rot- 
terdam to the Black Sea. As a result, Europe's inland waterway 
traffic is expected to triple by the end of the 1990s. The main traffic 
will likely be in bulk commodities, some of which might be off- 
loaded in Vienna and transshipped elsewhere. The Vienna port 
already serves as a principal petroleum and petroleum products 



155 



Austria: A Country Study 

terminal because it is linked by an oil pipeline to Trieste. The port 
of Vienna is equipped with automobile transshipment facilities and 
a large grain terminal. 

Austria has a small national airline. Austrian Airlines is 51 per- 
cent state owned and operates throughout Europe and the Middle 
East, as well as across the Atlantic. It also operates an air freight 
line, Austrian Airtransport. In addition, there are two smaller pri- 
vately owned air carriers, Lauda Air and Tyrolean Airways. The 
latter airline operates from Innsbruck and largely ferries passengers 
to and from Alpine destinations. Austria's one important interna- 
tional airport is at Schwechat, located near Vienna. Of the smaller 
airports, Salzburg, Innsbruck, Graz, Klagenfurt, and Linz are the 
most important and receive international as well as domestic flights. 

Telecommunications in Austria are excellent. In 1991 there were 
3.3 million main telephone connections, or one for every two in- 
habitants. International facsimile (fax), data transmission, and telex 
services are also available. In 1992 there were 2.5 million televi- 
sion sets (black-and-white and color) and 4.7 million radios. The 
state-owned and state-controlled Austrian Radio and Television 
(Osterreichischer Rundfunk — ORF) is responsible for all broad- 
casting. In 1992 there were six AM radio stations, twenty-one FM 
radio stations, and forty-seven television stations. The country's 
satellite ground stations are linked with International Telecommu- 
nications Satellite Organization (Intelsat) Atlantic Ocean and In- 
dian Ocean satellites and with the European Telecommunications 
Satellite Organisation (Eutelsat) system. 

Tourism 

Tourism is an important part of Austria's services sector. In 1991 
foreign tourists accounted for earnings of SI 92. 4 billion, almost 
offsetting the negative trade balance and deficits in services or other 
accounts. Tourism is a principal industry and source of foreign 
exchange. In fact, Austria's per capita tourist revenue is the highest 
in the world. Foreign overnight stays in Austria have risen consis- 
tently since World War II, from 50 million in 1950, to 59 million 
in 1970, and to 95 million in 1990. With 20 million visitors in 1990, 
Austria was fifth in the world in tourist revenues, surpassed only 
by the United States, France, Italy, and Spain. Most tourists come 
from European countries. Almost two-thirds come from Germa- 
ny, followed by the Netherlands (10 percent) and Britain (5 percent). 

Austria's largest tourist attraction has long been the Alps — for 
skiing in the winter and for hiking and camping in the summer. 
For this reason, the mountainous provinces of Tirol, Carinthia, 
and Vorarlberg produce the greatest tourist revenues. Salzburg is 



156 




Vienna International Airport 
Courtesy Luftreportagen Hausmann, Vienna, and ICD Austria, New York 

an important tourist attraction in the summer. Vienna remains a 
tourist center all year but does not generate as much tourist revenue 
as the mountain areas. 

Austria has 20,000 hotels and pensions, as well as an additional 
50,000 private rooms available to house tourists. In addition, there 
are thousands of simpler accommodations, such as youth hostels, 
mountain huts, and campsites. 

Austria has also made significant progress in becoming an in- 
ternational conference center. The so-called United Nations City, 
located outside Vienna, contains the headquarters of a number of 
major United Nations (UN) organizations. Vienna also has an in- 
ternational conference center. Taking advantage of Austria's neutral 
status, Vienna has hosted numerous East- West negotiations and 
is the permanent seat not only of such long-established organiza- 
tions as the International Atomic Energy Agency but also of the 
newer Conference on Security and Cooperation in Europe. The 



157 



Austria: A Country Study 

opening of Eastern Europe is likely to make Vienna an even more 
important center for East- West travel. 

Money and Banking 

The Austrian banking system is under the broad direction of 
the Nationalbank, the Austrian central bank, in coordination with 
the Austrian government. The bank is centralized, unlike the Unit- 
ed States Federal Reserve System. It is the bank of issue and en- 
joys substantial autonomy, while consulting with the Austrian 
government. 

Austria's currency, the schilling, is strong and stable. There was 
an attempt to float it in 1973, when various global currencies floated 
after the collapse of the Bretton Woods system, but in July 1976 
the schilling was formally pegged to West Germany's currency, 
the deutsche mark. This policy was abandoned in December 1977, 
but the schilling remained stable in relation to the deutsche mark 
through management of short-term interest rates and through care- 
ful efforts to control the Austrian monetary supply. In practice, 
the policy meant that Austria was an informal member of the Eu- 
ropean Monetary System (EMS — see Glossary) and its exchange 
rate mechanism (ERM — see Glossary) since their establishment 
in 1979, and the country was expected to join the European Mone- 
tary Union (EMU) under whatever arrangement and timing might 
finally be agreed. 

The principal banks are full-service banks, of which there were 
about fifty-five with approximately 850 branches at the end of 1991 . 
They transact all kinds of business and also channel credit for all 
purposes. Many of them function only regionally, but the two larg- 
est — the Creditanstalt-Bankverein and Bank Austria — operate 
throughout Austria. The state owns majority shares in both those 
banks. Bank Austria, the country's largest bank, was created in 1991 
by a merger of Osterreichische Landerbank with Zentralsparkasse. 
This and other mergers could make Austrian banking more com- 
petitive within the larger European framework. 

The banking system consists of a number of other kinds of insti- 
tutions as well. These include the ten provincial mortgage banks 
(Hypobanken), with 124 branches in 1989; the savings banks (Spar- 
kassen), of which there were about 126 with 1,278 branches in 1988 
that function as regular local banks despite their name; the people's 
banks (Volksbanken) , of which there were 103 with 323 branches in 
1989 that serve small business as commercial credit cooperatives; 
the agricultural credit cooperatives (Rqffeisenkasseri), of which there 
were 863 in 1989 with over 1,600 branches; and a small number 
of private banks and specialized institutions. 



158 



The Economy 



The system is locally and regionally based, with savings and credit 
channeled at the district level; full-service banks serve large com- 
panies. The post office system, with over 2,000 branch offices 
throughout Austria, also plays an important role in household sav- 
ings. Austria has one of the highest savings rates in the OECD, 
and most of the funds saved are deposited in the banking system. 

Banks play the central role in the Austrian financial system, es- 
pecially in corporate finance. They carry out not only regular 
deposit and lending activities but also such other functions as port- 
folio management and investment advice. Because most savings 
are deposited in banks, banks are the principal source of funds for 
business. Austrian banks tend to maintain close relations with in- 
dustry, especially with the firms to which they have extended credit. 
Banks are often represented on supervisory boards or, at the very 
least, play prominent roles in advising firms with respect to busi- 
ness and investment decisions. 

Austrian financial markets reflect this situation. There is an im- 
portant bond market, largely for government and bank issues and 
for utilities, about eight times as large as the equity market. The 
debt-to-equity ratio for corporate financing is high, more like the 
German model than the British or United States model. In the early 
1990s, the Vienna stock exchange was a very limited market, 
although it will probably become more important as the privatiza- 
tion of nationalized companies continues. The money market is 
also dominated by banks. 

Foreign Economic Relations 

Foreign Trade and the Balance of Payments 

Like any small country, Austria depends heavily on foreign trade. 
Its central location in Europe reinforces that dependency and gives 
Austria a wide range of trading partners in both Eastern Europe 
and Western Europe. Austria also consistently seeks to avoid iso- 
lation and has joined international trading systems to ensure mar- 
kets for its products and access to the goods it needs. 

As the economy has evolved and produced a more sophisticated 
range of products, foreign trade has become more important. For- 
eign trade made up about one-fourth of GDP in 1955, one-third 
by 1975, and two-fifths by 1990. Austria's export structure has also 
evolved. One-half the country's exports were once raw materials, 
foods, and semifinished goods, but by the early 1990s two-thirds 
of its exports were finished products. Imports have came to reflect 
this change and consist mostly of industrial and semifinished goods 
that require further processing and finishing. 



159 



Austria: A Country Study 

The largest category of exports in 1991 was machinery and equip- 
ment, accounting for almost one-third of all exports. Other major 
items included chemical products, paper and paper products, trans- 
portation equipment, metal manufactures, and textiles and clothing. 
The largest single import item was also machinery and equipment; 
other items were manufactured products, chemical products, and 
fuels and energy. 

Austria's main trading partners are in continental Europe, es- 
pecially Germany, Italy, and Switzerland (see table 11, Appen- 
dix). Because of a heavy dependence on imports, Austria usually 
has a negative trade balance, which is compensated for by positive 
services accounts and capital accounts (see table 12, Appendix). 
Income from tourism is especially important in reducing the nega- 
tive trade balance. The trade balance deteriorated particularly dur- 
ing the 1970s because of increased oil prices, and Austria had to 
make special efforts during the 1980s to redress the balance. 

Austria and European Integration 

Given its dependence on international trade, Austria has always 
been interested in some form of customs union. Although it was 
recognized that there might be some competitive disadvantages in 
such associations, especially with countries that produced at more 
competitive prices, the Austrian government and Austrian manufac- 
turers have always been even more afraid of being excluded. They 
feared that exclusion would prevent them from reaping any econ- 
omies of scale and would ultimately consign them to an economic 
backwater. 

The government, therefore, was anxious to join in some form 
of European economic association as several organizations were 
being shaped after World War II. It could not join the European 
Community (EC) as it was being formed, however, because of fear 
that this would violate the 1955 State Treaty prescription for neu- 
trality. The member states of the EC called their organization the 
Common Market when they created it in 1958, but they made it 
clear from the beginning that it had a political as well as an eco- 
nomic purpose. Under those circumstances, Austria had to hold 
back as long as Europe was divided by the Cold War. 

However, such considerations did not prevent Austria from join- 
ing the European Free Trade Association (EFTA — see Glossary) 
when it was formed in 1960. EFTA was a purely economic associ- 
ation, and its members included Finland, Sweden, and Switzer- 
land, all neutral states that were not members of the North Atlantic 
Treaty Organization (NATO). Moreover, EFTA had no inten- 
tion of becoming anything more than a trade association. EFTA 



160 



The Economy 



was far from an ideal trading arena for Austria because most of 
its members were located on the periphery of Europe. EFTA coun- 
tries came to account for less than 15 percent of Austria's trade, 
while 66 percent of its foreign trade was with the EC countries. 

EFTA, however, did have a very important specific advantage 
from the Austrian standpoint because it did not require common 
tariffs. Thus, Austria could retain some control over the conditions 
under which its foreign trade operated, while expanding its close 
commercial links with a number of EC states (even as it remained 
formally outside the EC). 

Austria attempted to obtain associate status in the EC despite 
the political barrier to full membership. As it became clear in the 
1960s that some EFTA members, such as Britain, were beginning 
to edge toward EC membership, Austria began its own negotia- 
tions to obtain a special arrangement with the community. In 1972, 
after ten years of negotiations, Austria and the EC reached an agree- 
ment providing for a gradual lowering of tariffs to zero. Austria 
nonetheless remained outside the EC Common Agricultural Policy 
(CAP). 

The Austrian government applied to join the EC in the sum- 
mer of 1989, as the Soviet empire was crumbling and Moscow was 
no longer either disposed or able to use the neutrality restrictions 
of the State Treaty to bar Austria from membership. Like other 
EFTA states, Austrian officials agreed in 1991 to the formation 
of the European Economic Area (EEA) between EFTA and the 
EC as a preliminary step, but it also wanted to join the organiza- 
tion on its own. 

Although Austria will probably not be able to join the European 
Union (EU) — as the EC came to be known in November 1993 — 
until 1995, by which time the Single Market should be well ad- 
vanced, the government has taken steps to begin adapting the econ- 
omy to EC standards. Along with adopting many EC laws and 
regulations through the EEA in 1991 , the government has adopted 
a number of additional EC rules, including those governing the 
freedom of capital flows. These measures have been taken to en- 
sure that the social partners and the economy as a whole would 
not be at a disadvantage when Austria becomes an EU member. 

Under the terms of the agreement reached at the EC summit 
at Maastricht in December 1991, Austria's membership in the EU 
will also lead to membership in the new European Monetary 
Union (EMU) if Austria can meet the convergence requirements 
by 1997. These requirements include a number of features: an in- 
flation rate within 2.5 percent of the three lowest in the EU; long- 
term interest rates within 2 percent of the three lowest rates; a 



161 



Austria: A Country Study 

government deficit below 3 percent of GDP; and a public-sector 
debt of less than 60 percent of GDP. As of 1993, Austria was able 
to meet these requirements, but there is no guarantee that that will 
be the case in 1997. 

Austria tied the schilling to the deutsche mark in the 1960s, large- 
ly because the country could not function without a predictable 
exchange rate with its largest trading partner, West Germany. In 
part to reinforce that linkage, Austria joined the EMS and its ERM 
in 1979. This membership has meant that Austrian interest rates 
have matched those of the Bundesbank and, as a result, to all in- 
tents and purposes have been set in Frankfurt. Therefore, Austrian 
adherence to the EMU would be a logical extension of long- 
established policies, and Austrian currency would become whatever 
the EMU adopted, whether it is called the European Currency Unit 
(ECU) or the Euro-Mark as some have proposed. 

The link to the deutsche mark has had a major advantage for 
Austria in that it has given the country a long period of low infla- 
tion and the kind of monetary stability that those who suffered 
through the terrible inflation of 1921-23 well appreciate. It is, 
however, also a disadvantage for Austria's international competi- 
tive position. Goods denominated in schillings, like goods denomi- 
nated in deutsche marks, cannot count on any sales increases 
because of devaluation of the currency. In fact, the schilling has 
consistently increased in value since the end of the Bretton Woods 
fixed exchange-rate era in 1971. It has generally moved with the 
deutsche mark vis-a-vis the United States dollar. 

Openings Toward the East 

Austria had maintained close trade relations with various states 
of Central and Eastern Europe under the Council for Mutual Eco- 
nomic Assistance (Comecon) arrangements. Those arrangements 
collapsed at the end of the 1980s and, as of the early 1990s, had 
not yet been renegotiated. Because of the turmoil in several East 
European states, for example in the former Yugoslavia, precise trade 
arrangements will likely require some time to be negotiated. 

Nonetheless, Austrian firms have proceeded actively to strengthen 
their position in Eastern Europe. Austrian firms soon were a major 
part of the thousands of joint-venture agreements established with 
Hungary, the Czech Republic, and Slovakia. Austrian firms have 
also become involved in many joint ventures in the former Yugo- 
slavia, but their fate remains uncertain as long as the region is un- 
stable. Austrian firms have always been well placed in Slovenia 
and Croatia, both of which were once part of Austria-Hungary, 



162 



The Economy 



and Austria resumed economic links with them as soon as they be- 
came independent in 1992. 

Austrian foreign investment, which has always remained closely 
in balance with foreign investment in Austria, although both had 
risen over the years, suddenly doubled to SI 1 .4 billion in 1989 and 
rose to a new high of SI 8. 3 billion in 1990. Much of the new in- 
vestment was destined for Eastern Europe. 

One of the hopes of the government is that many companies 
wanting to expand their operations in Eastern Europe will estab- 
lish offices in Vienna. The city offers office space with modern fa- 
cilities, often at modest prices. As of the early 1990s, a number 
of companies had set up operations there for these reasons. 

In a broader sense, many of Austria's domestic and international 
policies will need to be adjusted to take into account developments 
taking place around Austria. Such concerns have been expressed 
before, by Austrians and by others, but may be more urgent in 
the future than in the past. The opening toward Eastern Europe 
and the creation of the EEA and the Single Market have changed 
the foundations on which Austria has functioned since the 1950s 
and will present new competitive challenges for production, mar- 
keting, and services. 

As of late 1993, however, there were no indications that Austria 
had changed its patterns of behavior and operations, largely be- 
cause they have been successful. The pressures that might provoke 
such a revision have not risen to the level where change is impera- 
tive. Moreover, if Austria needs to make changes to adjust to new 
pressures, many arguments could be made that some form of so- 
cial partnership or social consensus mechanism may be more neces- 
sary than ever. 

As is the case with many small countries, few studies of Austria 
exist in English, and the economy receives even less attention than 
other areas. Except for one collection of essays dating back to 1982, 
The Political Economy of Austria, edited by Sven W. Arndt, nothing 
comprehensive is available on the economy. Even books in other 
languages are rare, in part because most German-language books 
are highly technical. Instead, those who want to read about the 
Austrian economy must look for economic chapters in general texts 
about Austria, many of which are unsatisfactory. 

However, a number of publications exist that contain relatively 
good information. The most useful are the annual publications of 
the Organisation for Economic Co-operation and Development that 



163 



Austria: A Country Study 



not only contain statistical information but also essays on various 
basic aspects of the economy. The quarterly and annual surveys 
published by the Economist Intelligence Unit, Country Report: Aus- 
tria and Country Profile: Austria, also offer useful statistical informa- 
tion as well as summary analyses. 

A number of German-language periodicals are published in Aus- 
tria, including some published by major banks and some that are 
published by the Osterreichisches Institut fur Wirtschaftsforschung. 
These periodicals offer some useful up-to-date analyses as well as 
complete statistics. Thus, although the Austrian economy does not 
receive the kind of bibliographic attention that larger economies 
attract, basic information is available and reliable. (For further in- 
formation and complete citations, see Bibliography.) 



164 



Chapter 4. Government and Politics 



Coat of arms of the province of Upper Austria 



AUSTRIA'S POLITICAL SYSTEM has been a model of sta- 
bility since democracy was restored in 1945. In contrast to the 
interwar period, when domestic political rivalries and foreign 
intervention brought the system of government set out by the con- 
stitution of 1920 to a standstill, after World War II this reestab- 
lished parliamentary democracy functioned smoothly in what came 
to be termed the Second Republic. 

For most of the postwar period, Austrian politics appeared unique 
in many respects to outside observers. Between 1945 and 1966, 
the country was ruled by the so-called grand coalition of the two 
major parties, the Austrian People's Party (Osterreichische 
Volkspartei — OVP) and the Socialist Party of Austria (Sozialistische 
Partei Osterreichs — SPO). (In 1991 the name of the latter party 
was changed to the Social Democratic Party of Austria [Sozial- 
demokratische Partei Osterreichs — SPO].) This arrangement ap- 
pealed to Austria's politicians and people mainly because it 
symbolized the reconciliation between social groups that had fought 
a brief civil war before the absorption (Anschluss) of Austria by 
Nazi Germany in 1938. The coregency of the OVP and SPO led 
to the systematic dividing of political offices and civil service posts, 
known in Austria as Proporz. Also benefiting from this arrangement 
were key economic and professional organizations that were aligned 
with the two major parties. 

At times, Austria's political system seemed impervious to change, 
but by the middle of the 1980s, it had become clear that far-reaching 
social and economic trends were beginning to affect the country's 
politics. The dominance of the OVP and SPO was challenged by 
the reemergence of the Freedom Party of Austria (Freiheitiiche Par- 
tei Osterreichs — FPO), led by Jorg Haider, a young right-wing 
populist who appealed to German nationalist sentiment. After the 
FPO's short-lived coalition with the SPO between 1983 and 1986, 
it continued to attract increasing numbers of voters. In the national 
election of 1990, the FPO won 16.6 percent of the vote, establish- 
ing itself as a new power in the Nationalrat (National Council), 
the lower house of parliament. In early 1993, however, some mem- 
bers of the FPO withdrew from it and formed their own party, The 
Liberal Forum (Das Liberale Forum), a potential threat to Haid- 
er's political future. Concern over environmental issues has also 
affected the Austrian political process, as evidenced by the entry 
of Green political parties into parliament in 1986. Previous patterns 



167 



Austria: A Country Study 

of government, which revolved almost exclusively around reach- 
ing agreement between the OVP and the SPO, were replaced by 
a more contentious, freewheeling atmosphere where more voices 
are heard. 

While the political process underwent gradual but distinct changes, 
a variety of scandals during the 1980s brought Austria to the world's 
attention. The best-known involved Kurt Waldheim, elected presi- 
dent in 1986. Shortly after his election, a sharp international con- 
troversy erupted over whether he had been involved in Nazi atrocities 
in Yugoslavia during World War II. Although a thorough investi- 
gation found no evidence that Waldheim had participated in any 
atrocities, his method of handling the affair disappointed many Aus- 
trians and foreign observers. The strong emotions unleashed inside 
Austria by this matter showed that the older generation is still reluc- 
tant to discuss the country's role in the Nazi era. 

Major changes in Austria's political landscape opened prospects 
of a new basis for its foreign policy. The bedrock of Austrian 
diplomacy in the postwar period has been its commitment to per- 
manent neutrality. In order to achieve the removal of Soviet oc- 
cupying forces, the Austrian government in 1955 pledged never 
to join a military alliance or to permit the stationing of foreign troops 
on its soil. Thereafter, Austria pursued a policy of active neutrali- 
ty, which included participation in numerous United Nations 
peacekeeping operations. During the Cold War period, Austria was 
a consistent advocate of detente between the United States and the 
Soviet Union. 

By the late 1980s, a growing number of politicians had concluded 
that the country should examine closely the question of whether 
or not to join the European Community. After a prolonged de- 
bate over the merits of membership, the Austrian government sub- 
mitted a formal entry application in the summer of 1989. As of 
late 1993, a substantial number of Austrian citizens still had seri- 
ous reservations about joining the organization, which as of Novem- 
ber 1993 came to be known as the European Union. Membership 
would have to be approved in a popular referendum. Whatever 
the outcome of the vote, the disintegration of communism in Eastern 
Europe and the dissolution of the Soviet Union have raised the ques- 
tion of whether neutrality should — or could — remain the guiding 
principle of Austrian foreign policy. 

Constitutional Framework 

Austria is a parliamentary democracy of the kind that exists in 
most of Western Europe. The legal basis for the Austrian system 
of government is the constitution of 1920, which was amended in 



168 



Austria's parliament meets in this building in Vienna. 

Courtesy Embassy of Austria, Washington 

1929 and several times thereafter. The constitution of 1920 provided 
a transition from Austria-Hungary (also seen as the Austro- 
Hungarian Empire) to a democratic federal republic in which the 
law emanates from the people. The constitution was suspended from 
1934 to 1938 during the authoritarian administrations of Engel- 
bert Dollfuss and Kurt von Schuschnigg and again during the 
Anschluss that was forced on Austria by Adolf Hitler from 1938 
to 1945. Since 1945, when the Second Republic was proclaimed, 
Austria has been governed by the 1920 constitution as amended. 

Executive, legislative, and judicial branches of government were 
established by the 1920 constitution, with the executive branch 
subordinate to the legislative branch. The federal presidency as es- 
tablished by the 1920 constitution was a weak political office whose 
incumbent was elected by a joint session of the bicameral legisla- 
ture, the Bundesversammlung (Federal Assembly). The constitu- 
tional amendments of 1929 increased the president's political role 
by granting him the formal power to appoint or dismiss the chan- 
cellor and, on the chancellor's recommendation, the cabinet. The 
1929 amendments also provided that the right of electing the presi- 
dent be taken away from the legislature and given to the people. 

Austria's political system is federal in nature, reflecting the fact 
that the country consists of nine provinces. Although Article 15 



169 



Austria: A Country Study 

of the constitution states that the provinces shall have jurisdiction 
over all matters not explicitly reserved for the federal government, 
Austrian federalism is weak and underdeveloped. The areas of law 
reserved for the provinces are few in number and relatively unim- 
portant. Among the areas where the federal government is almost 
exclusively responsible are foreign affairs, national security, justice, 
finance, civil and criminal law, police matters, and education. In 
other areas of law, the provinces are called on to pass implement- 
ing legislation for matters already decided at the federal level. This 
process, known as indirect federal administration, applies to areas 
such as elections, highway police, and housing affairs. Other laws 
are made and administered at the provincial level, but within fed- 
erally established guidelines. These concern social welfare, land 
reform, and provincial administration. Areas where the provinces 
have primary authority include municipal affairs (for example, trash 
removal and major aspects of zoning), preschool and kindergar- 
ten, construction laws, fire control, and tourism. 

The constitution does not include a bill of rights as such, but 
it does guarantee equality before the law and further guarantees 
that there shall be no discrimination because of birth, gender, civil 
status, class, or religion. Individual rights are further defined by 
inclusion in the constitution of the final article, which raises cer- 
tain older Austrian laws to the rank of constitutional law. Among 
them is the Basic Law of December 1867, which establishes equal- 
ity before the law, inviolability of property, and freedom of assem- 
bly, expression, and worship. Laws promulgated in 1862 set forth 
individual rights regarding personal liberty and one's home. These 
rights include not being held without a warrant and, except in un- 
usual circumstances, not allowing homes to be searched without 
a warrant. 

Some restrictions are placed on freedom of expression and as- 
sociation. Proper authorities must be informed when a new associ- 
ation is formed. Officials then have six weeks to object to its 
formation if the group is thought to be illegal or a potential threat 
to the republic. Since the Second Republic was established in 1945, 
care has been taken to ensure that laws concerning individuals are 
in accord with the United Nations Universal Declaration of Hu- 
man Rights of 1948. 

Amendments to the constitution can be made through laws desig- 
nated constitutional laws or through constitutional provisions if the 
amendment is part of another law. Passage of an amendment re- 
quires a two-thirds majority vote in the presence of at least one-half 
the members of the Nationalrat (National Council), parliament's 
lower house. Constitutional laws or provisions are accompanied 



170 



Government and Politics 



by a national referendum only if requested by one-third of the 
deputies of either the Nationalrat or the Bundesrat (Federal Coun- 
cil), parliament's upper house. In 1984 a constitutional amend- 
ment provided that amendments changing the division of 
responsibilities between the federal government and the provinces 
require the approval of two-thirds of the Bundesrat as well as two- 
thirds of the Nationalrat. 

In addition to the amended constitution, two laws — a treaty and 
a constitutional law — are particularly important to the constitu- 
tional development of Austria because they concern the country's 
international status and reaffirm the people's basic rights. In April 
1955, a stalemate over the restoration of full sovereignty to Aus- 
tria was finally broken when the Soviet Union agreed to drop its 
insistence that a solution to the Austrian question be tied to the 
conclusion of a peace treaty with Germany. This paved the way 
for the signing of the State Treaty in May 1955 by the Four Pow- 
ers (Britain, France, the Soviet Union, and the United States) and 
Austria. The treaty established Austria's frontiers as those existing 
on January 1 , 1938, and forbade economic or political union with 
Germany. Rights to a democratic government and free elections 
were guaranteed, and the document reiterated guarantees of funda- 
mental rights and freedoms, including equal rights for minorities. 
Specifically mentioned in this category were Slovenes and Croats. 
The second law of constitutional importance is the federal constitu- 
tional Law of October 26, 1955, on the neutrality of Austria. The 
law declared the country's permanent neutrality and prohibited 
it from entering into military alliances or allowing foreign coun- 
tries to establish military bases within the borders of Austria. 

Government Institutions 

The Austrian system provides for a president who is popularly 
elected. The president functions as head of state and has little 
authority over the actions of the government. Political power is 
in the hands of Austria's head of government, the chancellor (prime 
minister), who, as in parliamentary systems elsewhere, is usually 
the leader of the party with the most seats in the lower house of 
the country's bicameral parliament, the Nationalrat (National 
Council). The chancellor and his cabinet have extensive executive 
powers and also are the authors of most legislation. Yet, however 
great the powers of the executive are, it is politically responsible 
to the Nationalrat and can govern only with its approval. The up- 
per chamber of parliament, the Bundesrat (Federal Council), 
represents the interests of Austria's nine provinces. Its limited pow- 
ers reflect the underdeveloped nature of Austrian federalism. The 



171 



Austria: A Country Study 



ADMINISTRATION 



DIRECTS 



CONSTITUTIONAL 
COURT 



CHANCELLOR 



CABINET 




APPOINTS 
— -OR— 

DISMISSES 



PRESIDENT 



BUNDESRAT 



NATIONALRAT 



| L E G 1 

DETERMINES 




PROVINCIAL 
LEGISLATURES 



ELECTS 



ELECTORATE 



Source: Based on information from Kurt Richard Luther and Wolfgang C. Miiller (eds.), 
Politics in Austria, London, 1992, 101; andMelanieA. Sully, A Contemporary History 
of Austria. London. 1990. 155. 

Figure 11. Structure of Government, 1993 

chancellor and the cabinet, together with their party's representa- 
tives in the Nationalrat, are the main center of government activity 
and power (see fig. 11). 

The Federal President 

A 1929 amendment to the 1920 constitution introduced the con- 
cept of a popularly elected president. Because of the suspension 
of the constitution in 1934, however, the first popular election of 
a president did not take place until 1951. The president serves a 
six-year term and is limited to two consecutive terms. Candidates 
must be at least thirty-five years of age and eligible to vote in Na- 
tionalrat elections. 

Political parties nominate presidential candidates, but it is cus- 
tomary, given the limited powers of the position, for the president 



172 



Government and Politics 



to serve in a nonpartisan manner. To win an election, a candidate 
must receive more than 50 percent of the votes. If no candidate 
succeeds on the first ballot, a runoff election is held between the 
two candidates receiving the highest number of votes. The presi- 
dent serves as head of state. Presidential duties include convok- 
ing, adjourning, and, in rare cases, dissolving the Nationalrat. The 
president signs treaties, verifies that legal procedures for legisla- 
tion have been carried out, and grants reprieves and pardons. 
Although he cannot veto legislation, the president is empowered 
to reject a cabinet proposal or delay enactment of a bill. Unless 
the constitution states otherwise, official acts of the president re- 
quire the countersignature of the chancellor or the relevant minister. 

The president plays an important, though largely formal, role 
in the political process of forming and dissolving governments. In 
the aftermath of a parliamentary election, the president invites the 
leader of the strongest party in the Nationalrat to form a govern- 
ment. This duty reflects the fact that both the government and 
parliament are responsible to the president in the sense that he can 
dismiss individual members of the government, including the chan- 
cellor, as well as dissolve the Nationalrat. The president, on the 
recommendation of the chancellor, also appoints individuals to cabi- 
net positions and other important government positions, includ- 
ing that of vice chancellor. The president also can dismiss individual 
cabinet officials, but only on the recommendation of the chancel- 
lor. During the Second Republic (that is, since 1945), the presi- 
dent has dissolved the Nationalrat only twice, in 1971 and 1986, 
in both cases because the incumbent chancellor and his party wished 
to have a new election. 

The president has emergency authority that gives him signifi- 
cant powers. Should an emergency arise when the Nationalrat is 
not in session, the cabinet can request that the president act on 
the basis of "provisional law-amending ordinances," as provided 
for in the constitution. Such ordinances require the countersigna- 
ture of the cabinet. Emergency decrees must be sent to the Na- 
tionalrat. If it is not in session, the president must convoke a special 
session. The Nationalrat has four weeks either to enact a law to 
replace the decree or to void the decree. 

Two procedures are outlined in the constitution for pressing 
charges against the president: one entails a referendum; the other 
entails a vote by a joint session of parliament, the Bundesversamm- 
lung (Federal Assembly). To set a referendum in motion, one-half 
of the Nationalrat deputies must be present and vote by a two-thirds 
majority to ask the chancellor to convoke the Bundesversammlung, 
which then must vote by a simple majority for a referendum. The 



173 



Austria: A Country Study 

referendum is carried if a simple majority of voters vote in favor 
of it. If the referendum is defeated, then the president is regarded 
as reelected, the Nationalrat is dissolved, and new elections are 
scheduled. Under no circumstances, however, shall a president serve 
more than twelve years in office. 

The second procedure for bringing charges against the president 
results from his being responsible to the Bundesversammlung, which 
is authorized to vote on his actions. Either house of parliament can 
ask the chancellor to convoke the Bundesversammlung for such 
a purpose. One-half of the members of each house must be present, 
and the Bundesversammlung must cast a two-thirds vote to press 
charges against the president. 

If the president dies or if the office is vacated for any other rea- 
son, a new election is held. In the interim, the chancellor carries 
out necessary presidential duties. 

Chancellor and Cabinet 

The chancellor (prime minister) is the head of government as 
well as chairman of the cabinet. Executive political power formal- 
ly rests in the hands of the cabinet. The chancellor, the cabinet, 
and their working majority in the Nationalrat are the real focal 
point of executive power in the political system. The chancellor 
is appointed by the president and can also be dismissed by him. 
The chancellor is usually the leader of the party that has won the 
most seats in the latest parliamentary election. At the very least, 
he or she is the choice of a majority of the new deputies. The chan- 
cellor must be eligible to serve in the Nationalrat but need not be 
a member of it. The chancellor also serves as head of the Federal 
Chancellery, which is staffed with civil servants. 

In most respects, the chancellor functions as first among equals 
in the cabinet. He coordinates the work of the cabinet but is not 
entitled to give orders to individual ministers. However, the chan- 
cellor's power varies depending on political circumstances and his 
own political gifts. In a coalition government, the chancellor shares 
coordinating duties with the vice chancellor, who is the leader of 
the junior party in the coalition. If the chancellor heads a one-party 
government, his or her leeway to make decisions is increased. Dur- 
ing the long period of rule under Chancellor Bruno Kreisky 
(1970-83), the public visibility of the chancellor was enhanced 
through the increased use of television. From the standpoint of 
the public, the chancellor had become the dominant figure of 
government. 

On the recommendation of the chancellor, the president appoints 
individuals to the various cabinet positions. Cabinet members do 



174 



Government and Politics 



not have to be members of the Nationalrat, but they must be eligi- 
ble to be elected to it. Persons chosen as cabinet ministers are usually 
leading members of a political party or interest group. Occasion- 
ally, however, a person has entered the cabinet from a high-level 
civil service position. 

The number of ministries varies; in 1993 there were fourteen 
ministries. In a coalition government, the apportionment of the 
cabinet posts is roughly proportional to the parties' respective 
strengths in the Nationalrat. The awarding of particular posts is 
based on a coalition agreement reached between the two parties. 

In keeping with the traditional Austrian principle of Proporz (the 
dividing of political offices according to the respective strengths and 
interests of the parties), parties name individuals to posts of par- 
ticular concern to them. For example, if the SPO is a member of 
the coalition, at a minimum it names the minister for labor and 
social affairs, in keeping with the strong support it enjoys from the 
trade unions. By the same token, if the OVP is part of the coali- 
tion, it names the minister for agriculture and forestry because farm- 
ers are one of its main interest groups. The chancellor and vice 
chancellor do not have total control over the selection process for 
filling cabinet positions. For example, the SPO faction in the Aus- 
trian Trade Union Federation (Osterreichischer Gewerkschafts- 
bund — OGB) usually chooses the minister for labor and social 
affairs, and the OVP is careful to allow its various auxiliary associa- 
tions and provincial parties to make certain selections. Beginning 
in 1987, the OVP and SPO have followed a practice of selecting 
an independent to head the Ministry for Justice. 

The cabinet is subject to dismissal by the president and the Na- 
tionalrat. The president can dismiss the entire cabinet without the 
concurrence of the chancellor, but removal of individual members 
requires the recommendation of the chancellor. If the Nationalrat 
passes a vote of no confidence — which requires that one-half of the 
deputies be present — concerning the entire cabinet or a minister, 
the cabinet or minister is removed from office. 

State secretaries are appointed and leave office in the same man- 
ner as ministers, but each government ministry does not have a 
state secretary. State secretaries aid ministers in parliamentary 
business and are bound by their ministers' instructions. They are 
nonvoting participants in cabinet sessions. A state secretary is not 
necessarily a member of the same party as the minister he serves. 

Nationalrat 

The Nationalrat (National Council), the lower house of parlia- 
ment, exercises all of the powers usually associated with a national 



175 



Austria: A Country Study 

legislature. It has the power to remove the entire cabinet or in- 
dividual members of it by a vote of no confidence. All legislation 
and treaties must be approved by the Nationalrat. Before a vote 
can take place, at least one- third of the Nationalrat' s members must 
be present. A simple majority suffices for the passage of legisla- 
tion. Sessions are public unless the deputies determine otherwise. 

Deputies elect a president and second and third presidents from 
among their members to serve during the four-year legislative term. 
Party leaders who are members of their party's executive and of 
a parliamentary faction that serves as a liaison between parliament 
and a political party are most likely to be presidential candidates. 
The president and the third president belong to the same party, 
usually the party holding the most seats in the Nationalrat. The 
second president belongs to the other major party. Presidential 
duties include nominating employees of the Federal Chancellery, 
whose staff serves the three presidents. The three presidents pre- 
side over plenary sessions in two-hour shifts. They also join with 
the chairmen of the parliamentary factions to form the Presidial 
Conference, which directs the Nationalrat 's activities and decides 
the time and agenda of plenary sessions and, to a lesser extent, 
the time and agenda of the committees. The Presidial Conference 
is one of the rare groups not affected by the custom of proportion- 
al representation. All parties holding seats in the Nationalrat are 
represented on the conference. 

In 1993 the Nationalrat contained roughly fifteen committees 
in which legislative proposals are both prepared and examined and 
the results of parliamentary investigations considered. Each com- 
mittee has various numbers of subcommittees assigned to deal with 
specific kinds of legislation. In addition to the committees, there 
are also the Main Committee and the Permanent Subcommittee, 
the members of which are elected at the start of each new legisla- 
tive period. The Main Committee has responsibility for oversee- 
ing aspects of the state-run industries and for dispatching Austrian 
troops on international peacekeeping missions. It also participates 
in deciding the date for Nationalrat elections and setting rates for 
postal and telephone services. The president of the Nationalrat 
serves as chairman of the Main Committee. The Permanent Sub- 
committee plays a limited role because its main function is to ful- 
fill the duties of the Main Committee in the case of the dissolution 
of the Nationalrat by the president. 

Equally as important as the committees are the Klubs (factions), 
which all parties in the Nationalrat maintain. The factions usually 
have a leader and an executive committee, and they provide 
deputies with a behind-the-scenes setting to discuss political strategy 



176 



Government and Politics 



with like-minded colleagues. Individuals elected as deputies to the 
Nationalrat automatically become members of their party's fac- 
tion. Faction leaders assign deputies to committees and decide on 
the questions that are to be asked during debates and the priority 
for legislative initiatives. 

In addition to the work of the committees, another important 
function of the Nationalrat is to question the government regularly 
on its activities and legislative proposals. One device frequently 
employed is an "interpellation," which summons for questioning 
before the Nationalrat a particular cabinet minister or government 
official. A minimum of twenty deputies is required to set an inter- 
pellation in motion. Questioning a government official is the prelude 
to a parliamentary debate on the issue. 

A 1970 amendment to the election laws increased the number 
of Nationalrat seats from 165 to 183. Seats in the Nationalrat are 
divided among the country's nine provinces according to popula- 
tion. Deputies serve a four-year term and are elected according 
to constitutional and other federal laws. Candidates must be at least 
twenty years old on January 1 of the election year and must also 
be eligible to vote. 

The Nationalrat has only one session per year, beginning no 
earlier than September 15 and ending no later than July 15. An 
extraordinary session of the Nationalrat can be convoked either 
by order of the federal president, by request of the cabinet, or by 
request of one-third of the deputies. Once a request has been made, 
the extraordinary session must commence within two weeks. After 
a parliamentary election, the newly elected Nationalrat must be 
convened within thirty days. 

The Nationalrat can be dissolved either by presidential action 
or by itself. The president can dissolve the Nationalrat at the chan- 
cellor's request, but he is limited to dismissing it only once for the 
same reason. New elections must be held soon enough to enable 
the new parliament to convene within 100 days of the dissolution. 
The Nationalrat is empowered to dissolve itself by a simple majority 
vote. 

During the Second Republic, membership of the Nationalrat has 
been heavily weighted toward men who come from white-collar 
professions. Changes in the sociological profile of the deputies have 
occurred slowly. The Nationalrat elected in November 1990 con- 
tained a record 22 percent of female deputies. Prior to this elec- 
tion, female deputies had never accounted for more than 15 percent 
of the total number of deputies. The average age of the deputies 
elected in 1990 was forty-six. Almost 40 percent of the deputies 
elected in 1990 were university graduates, and 25 percent were 



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Austria: A Country Study 

employees of political parties, politically oriented interest groups, 
or social welfare organizations. 

The majority of legislative proposals originate in the executive. 
Legislation occasionally starts in the Nationalrat, but the close 
cooperation between the executive and the majority party in parlia- 
ment makes such initiation unnecessary most of the time. During 
the Second Republic, governmental legislative proposals have out- 
numbered Nationalrat initiatives by three to one. Parliament's role 
in the legislative process is focused more on bringing to public at- 
tention the background of the government's legislative proposals 
and exposing any mistakes the government may have made. Op- 
position parties have the right to force the government to answer 
any questions about pending legislation. 

Before a bill is introduced in parliament, it has already passed 
through an intensive process of examination. The government 
solicits comments from the various interest groups affected by the 
bill, especially the chambers of agriculture, commerce, and labor 
(see Principal Economic Interest Groups, ch. 3). During this stage, 
a bill frequently is modified to meet the objections of key interest 
groups and opposition parties in parliament. Changes to legisla- 
tive proposals may also be made after a bill has been introduced 
in the Nationalrat, but the majority of changes are made before 
the bill is introduced officially. Bills are amended significantly by 
the parliament only 10 to 15 percent of the time. 

By West European standards, the percentage of bills passed 
unanimously by the Austrian parliament is high. Unanimity 
prevailed anywhere between 38 and 49 percent of the time during 
the parliaments of the 1970s and 1980s. In the late 1980s and ear- 
ly 1990s, with the advent of the Greens in parliament and the in- 
creased power of the FPO, unanimity was on the decline. 

As the complexity of the issues facing government has increased, 
so too has the importance of committees to the parliament's work. 
After a bill reaches the Nationalrat, it is assigned to a committee 
and frequently also to a subcommittee. Deputies typically spend 
twice as much time in committee hearings as in plenary sessions. 
The subcommittees hold even more hours of hearings than the full 
committees. Because of the unwieldy nature of plenary sessions, 
80 percent of changes to government legislation occur in committee. 

In 1975 the Nationalrat amended its procedures to give the oppo- 
sition and smaller parties a greater role in the legislative process. 
Under the 1975 amendments, one-third of the deputies can request 
the Constitutional Court to review a law for constitutionality. Fur- 
ther, one-third of the deputies can request the government's ac- 
counting agency to conduct an audit of a government agency. These 



178 



Government and Politics 



changes reflect the intensification of political competition that oc- 
curred in the Nationalrat after the long period of grand coalition 
governments between the two major parties ended in 1966. The 
OVP, as the major opposition party during the era of SPO rule 
(1970-83), led the drive for greater rights for minority parties. 

Bundesrat 

The interests of Austria's nine provinces are represented at the 
federal level in the Bundesrat (Federal Council), the upper house 
of parliament. The Bundesrat has sixty- three seats, which are ap- 
portioned among the provinces on the basis of population. Each 
province is guaranteed at least three seats. As of late 1993, the break- 
down of seats was as follows: Vienna and Lower Austria had twelve 
each; Styria and Upper Austria, ten each; Tirol, five; Carinthia 
and Salzburg, four each; and Burgenland and Vorarlberg, three 
each. The members of the Bundesrat are elected by the provincial 
legislatures on the basis of proportional representation. At least one 
seat must be given to the party having the second largest number 
of seats in the provincial legislature. If several parties have the same 
number of seats, the party that won the second largest number of 
votes in the last provincial election is awarded a seat in the Bun- 
desrat. 

The main purpose of the Bundesrat is to protect provincial in- 
terests, but its powers are restricted because the government is not 
answerable to it. All laws passed by the Nationalrat must be present- 
ed to the Bundesrat for review. However, the Bundesrat can at 
most delay the passage of laws by means of a suspensive veto. In 
such a case, the bill is sent back to the Nationalrat, which can over- 
ride the Bundesrat' s veto by reapproving the bill. Once this is done, 
the bill becomes law. In 1984 the body's powers were increased 
by a constitutional amendment that required approval by two-thirds 
of the Bundesrat to any proposed constitutional change in the dis- 
tribution of competencies between the federal government and the 
provinces. Despite this change, the Bundesrat remains a weak in- 
stitution. 

Bundesversammlung 

The two houses of parliament meet jointly as the Bundesver- 
sammlung (Federal Assembly) to witness the swearing in of the 
president, to bring charges against him, or to declare war. Usual- 
ly, the Bundesversammlung is convoked by the president. If charges 
are brought against the president, the chancellor convokes the Bun- 
desversammlung. Meetings are chaired alternately by the presi- 
dent of the Nationalrat and the chairman of the Bundesrat. If the 



179 



Austria: A Country Study 

Bundesversammlung passes a resolution, its validity must be at- 
tested to by the chairman. The chancellor then countersigns and 
publishes the resolution. 

Judicial System 

The judicial system is independent of the executive and legisla- 
tive branches. The constitution establishes that judges are indepen- 
dent when acting in their judicial function. They cannot be bound 
by instructions from a higher court (except in cases of appeal) or 
by another agency. In administrative matters, judges are subor- 
dinate to the Ministry for Justice. A judge can be transferred or 
dismissed only for specific reasons established by law and only af- 
ter formal court action has been taken. The Austrian judiciary func- 
tions only at the federal level, and thus there is no separate court 
system at the provincial level. 

The Constitutional Court 

The Constitutional Court decides the legality of treaties and the 
constitutionality of laws and decrees passed at the federal, provin- 
cial, and local levels. Cases involving courts and administrative 
agencies or the Administrative Court and the Constitutional Court 
are heard in the Constitutional Court. Individuals can present cases 
to the court if they believe a decision of an administrative agency 
has violated their constitutional rights. Monetary claims against 
the state, provinces, administrative districts, or local communities 
that cannot be settled by a regular court or an administrative agency 
are brought to the Constitutional Court, as are claims regarding 
disputed elections. The court also decides questions of impeach- 
ment and hears cases charging the president with breaking a con- 
stitutional law or cases charging members of federal or provincial 
governments with breaking a law. 

The court is composed of a president, vice president, twelve 
judges, and six alternates. The federal president, on recommen- 
dations from the cabinet, appoints the court's president, vice presi- 
dent, six judges, and three alternates. The federal president appoints 
six additional judges and three more alternates based on nomina- 
tions from the Nationalrat (for three judges and two alternates) 
and the Bundesrat (for three judges and one alternate). The con- 
stitution requires that three judges and two alternates of the court, 
which sits in Vienna, live outside the city. The president of the 
court chairs its meetings and decides on the assignment of cases 
to individual judges, but he does not have voting rights. Cases are 
heard by five, nine, or all thirteen of the judges and are decided 
by majority vote. 



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Government and Politics 



The selection of judges for the Constitutional Court has been con- 
trolled by the OVP and the SPO. The two parties have applied 
the principle of Proporz to filling vacancies on the court. Between 
1945 and 1970, the OVP was the larger of the two parties in terms 
of parliamentary strength, and it controlled seven of the judgeships 
with voting rights; the SPO controlled six of the judgeships. Be- 
ginning in 1970, the ratio was reversed when the SPO gained more 
seats in the parliament than the OVP. 

The Administrative Court 

The Administrative Court, located in Vienna, is the court of 
final appeal for cases involving administrative agencies. The court's 
specific purpose is to determine whether an individual's rights have 
been violated by an administrative action or omission. Individu- 
als can also appeal to this court if an administrative agency fails 
to grant a decision in a case. The Administrative Court may not 
rule on matters that come under the competence of the Constitu- 
tional Court. 

The Administrative Court is presided over by a court president 
who is assisted by a vice president and several other court officers. 
Appointments to the court are made by the federal president on 
the recommendation of the cabinet. Prerequisites for appointment 
are completion of law and political science studies and ten years 
of experience in a related field. At least one- third of the court's 
members must be qualified judges, and at least one-fourth must 
come from the provinces, preferably from civil service positions. 
Panels of three, five, or nine judges sit in court at any one time, 
depending on the importance of the case. 

Ordinary Courts 

The system of ordinary courts is headed by the Supreme Court 
in Vienna. This court is the court of final instance for most civil 
and criminal cases. It can also hear cases involving commercial, 
labor, or patent decisions, but constitutional or administrative de- 
cisions are outside its purview. Justices hear cases in five-person 
panels. 

Four superior courts, which are appellate courts, are located in 
Vienna, Graz, Linz, and Innsbruck. They are usually courts of 
second instance for civil and criminal cases and are the final ap- 
pellate courts for district court cases. Usually, a three-judge panel 
hears cases. 

On a lower level are seventeen regional courts having jurisdic- 
tion over provincial and district matters. Boundaries of judicial dis- 
tricts may or may not coincide with those of administrative districts. 



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Austria: A Country Study 

Regional courts serve as courts of first instance for civil and crimi- 
nal cases carrying penalties of up to ten years' imprisonment and 
as appellate courts for some cases from district courts. Justices 
usually sit as a three-person panel, but some cases can be heard 
by only one judge. Vienna and Graz have separate courts for civil, 
criminal, and juvenile cases, and Vienna also has a separate com- 
mercial court. 

At the lowest level are about 200 district or local courts, which 
decide minor civil and criminal cases, that is, those involving small 
monetary value or minor misdemeanors. Questions involving such 
issues as guardianship, adoption, legitimacy, probate, registry of 
lands, and boundary disputes are also settled at this level. Depend- 
ing on the population of the area, the number of judges varies, 
but one judge can decide a case. Civil and criminal matters are 
heard in separate courts in Vienna and Graz. Vienna further di- 
vides civil courts into one for commercial matters and one for other 
civil cases. 

Ordinary court judges are chosen by the federal president or, 
if the president so decides, by the minister for justice on the basis 
of cabinet recommendations. The judiciary retains a potential voice 
in naming judges, inasmuch as it must submit the names of two 
candidates for each vacancy on the courts. The suggested candi- 
dates, however, need not be chosen by the cabinet. Lay people have 
an important role in the judicial system in cases involving crimes 
carrying severe penalties, political felonies, and misdemeanors. The 
public can participate in court proceedings as lay assessors or as 
jurors. Certain criminal cases are subject to a hearing by two lay 
assessors and two judges. The lay assessors and judges decide the 
guilt or innocence and punishment of a defendant. If a jury, usually 
eight lay people, is used, the jury decides the guilt of the defen- 
dant. Then jury and judges together determine the punishment. 

Special Courts 

Cases outside the jurisdiction of these courts are heard in spe- 
cial courts. For example, labor courts decide civil cases concern- 
ing employment. Employers and employees are represented in labor 
court hearings. Cases involving the Stock and Commodity Ex- 
change and the Exchange for Agricultural Products are decided 
by the Court of Arbitration, which is composed of members of the 
exchanges. Social insurance cases are heard by the provincial com- 
missions for social insurance. The Patent Court decides appeals 
of patent cases. 



182 



Government and Politics 



The People's Attorney 

The Office of the People's Attorney, which was created in 1977 
and granted constitutional recognition in 1981 , functions in a man- 
ner similar to an ombudsman's office. It is designed to assist citizens 
who believe that they have been improperly treated by government 
administration. The office can also initiate its own investigations 
if it suspects that particular government offices are engaged in cor- 
ruption or fraud. After concluding its investigations, the office has 
the authority to issue binding recommendations to government 
offices to rectify abuses. 

Legal Training 

Attaining the title of attorney-at-law requires eleven years of train- 
ing. Four years of this period consist of prescribed studies in law 
and political science at a university. On completion of a doctoral 
program, the candidate undergoes a seven-year apprenticeship, dur- 
ing which one year must be spent in a civil or criminal court and 
three years in an attorney's office. Finally, it is necessary to pass 
the bar examination. 

Civil Service 

Civil servants have held a position of respect in Austrian society 
since the formation of the civil service in the eighteenth century, 
when it was considered to be "carrying out a mission for the state. ' ' 
The civil service is highly regulated. Public servants take an oath 
of office, promise obedience to their superiors, and pledge to keep 
official matters secret. A civil servant may neither join an associa- 
tion nor be employed in another job that could be interpreted as 
unworthy of his or her position. 

Besides the high esteem in which the civil service is held, job 
security is also an attractive feature. Periodic raises are automatic, 
and promotions are scheduled at regular intervals. The retirement 
pension is adequate. A civil servant may be dismissed only for seri- 
ous misconduct. 

During the grand coalition of 1945-66, the OVP and SPO in- 
troduced the system of Proporz into the civil service. Prior to the 
founding of the Second Republic, the civil service had been domi- 
nated by OVP members, and thus after 1945 special steps were 
taken to recruit persons with ties to the SPO. The two parties came 
to exercise almost complete control of the personnel of the minis- 
tries that they controlled in the cabinet. During the period of single- 
party rule (1966-83), the importance of political allegiance came 
to play a lesser role in the selection process of the civil service. 



183 



Austria: A Country Study 

Chancellor Kreisky made sure that a large number of persons 
without party affiliation were appointed to high-level positions in 
the civil service. 

Reforms also were introduced in this period to make the civil 
service better able to attract highly qualified people. In 1975 a civil 
service training academy was established, and after 1980 some top 
positions were changed to fixed-term appointments. Further changes 
were made to give equal opportunity for career advancement to 
all members of the civil service, regardless of their specialty. Tradi- 
tionally, people with legal training had a decided advantage in ris- 
ing to the top of the system. As of 1993, the government was 
working on a comprehensive reform of the civil service system. 

Provincial Government 

Each of the nine provinces has its own constitution, which 
prescribes its governmental organization. Common to each province 
is an elected Landtag (provincial legislature), which is popularly 
elected on the basis of proportional representation. According to 
the federal constitution, the number of deputies can range from 
thirty- six to sixty-five, depending on the population of the province. 
Vienna, which is simultaneously a province and a city, is in a spe- 
cial category — its legislature has 100 deputies. A Landtag is sub- 
ject to dissolution by the federal president at the cabinet's request. 
This process requires the consent of the Bundesrat. One-half of 
the Bundesrat 's deputies must be present and cast a two- thirds vote 
in favor of the action. 

The Landtag elects an executive composed of a governor and 
councilors. A deputy is elected to serve in the absence of the gover- 
nor. Candidates for these positions must meet eligibility require- 
ments of the Landtag, although they need not belong to it. Elections 
to the Landtag occur every five years, except in Upper Austria, 
where they are held every six years. Legislative periods can be short- 
ened and elections held if the Landtag votes to dissolve itself. 

Provincial constitutions can be amended, provided that changes 
do not conflict with the federal constitution. Passage of a constitu- 
tional amendment requires the presence of at least one-half of the 
Landtag's members and a two-thirds majority vote. Regulations 
for passage of other provincial laws vary, but generally the proce- 
dure requires a vote by the Landtag, verification that the proper 
procedure has been followed, the countersignature of the prescribed 
official, and publication in the provincial law gazette. Before a law 
is published, the federal minister whose jurisdiction covers the area 
of the proposed law has to be informed of the province's action. 
The cabinet then has eight weeks to notify the province if the bill 



184 



Government and Politics 



interferes with federal interests. The Landtag can override the fed- 
eral government's objections by voting again in favor of the bill 
with at least one-half of its members present. The federal govern- 
ment would probably appeal to the Constitutional Court if it strenu- 
ously objected to a provincial law. 

The provinces have a restricted ability to raise taxes. They may 
not tax items already subject to federal taxation. Every four to six 
years, the federal government, the provinces, and the municipali- 
ties negotiate a Finance Equalization Law that determines how tax 
revenues raised at the federal and provincial levels are to be divid- 
ed. This system ensures that the provinces are fully compensated 
for the many federal programs that they implement. 

Article 15 (1) of the federal constitution states that matters not 
expressly reserved to the federal government come under the juris- 
diction of the provinces. Matters in which the provinces have 
primary jurisdiction include local police, primary education, hous- 
ing, health, and protection of the environment. If a provincial 
government believes that some federal action is infringing on its 
jurisdiction, it can appeal to the Constitutional Court for a ruling. 

Provisions exist for interprovincial coordination of policies by 
means of compacts and treaties. Such coordination, however, is 
feasible only if the matters at hand are among the autonomous rights 
of the provinces. This manner of cooperation has rarely occurred. 
Instead, conferences of provincial officials are held to plan less for- 
mal methods of cooperation. The federal government must be noti- 
fied of interprovincial action. 

Local Government 

Provinces are divided into districts and local communities. The 
primary function of district governments is to administer federal 
programs. They do not have the power of taxation. A district is 
headed by a district commissioner, usually a career civil servant, 
who is appointed by the provincial governor. Local communities 
are self-governing, having a popularly elected community council 
that is chosen by proportional representation on the basis of polit- 
ical party strength. The number of representatives ranges from 
seven to 100, depending on the population. Members serve a five- 
or six-year term as determined by provincial regulations. Com- 
munity council meetings are presided over by a mayor, elected by 
and responsible to the community council. 

The federal government or a province may delegate some func- 
tions to a local government. Otherwise, local communities deal with 
matters of local concern, such as safety, traffic, police, settlement 



185 



Austria: A Country Study 

of disputes that are not dealt with by the courts, public utilities, 
cultural institutions, public housing, and health care services. 

Local actions, whether autonomous or delegated, are in the long 
run usually subject to provincial or federal supervision or controls. 
Administrative and legal regulations on the provincial and federal 
levels are so pervasive that even decisions that are considered the 
sole responsibility of local communities are actually limited. Local 
communities, however, have recourse to the Administrative Court 
and the Constitutional Court if they believe that their rights are 
being infringed upon. 

Electoral System 

The electoral system is based on the principle of proportional 
representation. The system's basic outline was established in the 
constitution of 1920, although significant changes were made in 
1970 and 1992. Among other changes, the amendments of 1970 
raised the number of seats in the Nationalrat from 165 to 183. 

The 1992 reform of the election law, which went into effect in 
May 1993, alters the electoral system for the Nationalrat in a num- 
ber of significant ways. It divides the country into nine provincial 
electoral districts that correspond to the country's nine provinces. 
These districts contain a further forty-three regional electoral dis- 
tricts. The creation of the small regional electoral districts is in- 
tended to foster a greater feeling of connection between voters and 
those who represent them in parliament. The law also aims to per- 
sonalize elections by giving voters greater power than before of elect- 
ing individual candidates of the party of their choice by voting 
directly for them rather than for the party list of candidates as a 
whole. This reform may reduce the power of party leaders to im- 
pose their preselected candidates on the electorate. The law also 
modifies vote-counting procedures to ensure that the number of 
parliamentary seats won by a party will conform more closely with 
votes cast. Lastly, the law attempts to prevent a proliferation of 
small parties sitting in the Nationalrat by barring a party from that 
body if it has not won at least 4 percent of votes cast nationwide. 
However, a party can be represented in parliament by winning 
at least one seat in a regional electoral district. 

According to the 1992 law, votes in Nationalrat elections are 
counted in three stages, although a voter casts only one ballot. On 
this ballot, the voter indicates the party of his or her choice and 
then may choose two candidates from this party, one to be elected 
from the regional voting district and one from the provincial vot- 
ing district. Votes going to a preferred candidate are called pref- 
erential votes. In the first stage of counting votes, the returns 



186 



Vienna's city kail 

Courtesy Austrian National Tourist Office, New York 

from regional voting districts are examined; in the second stage, 
those from provincial voting districts are examined. In these first 
two stages, the Hare system (see Glossary) is used to determine 
the proportional allocation of seats. In the third stage of counting 
votes, candidates on the national party list are allocated seats ac- 
cording to the d'Hondt method (see Glossary). 

A party must win a parliamentary seat in the first stage of vote 
counting in order to win seats in the second and third stages. A 
candidate who receives preferential votes amounting to at least one- 
sixth of the votes his party receives wins a parliamentary seat. This 
is also the case for a candidate who receives preferential votes 
amounting to at least one-half the electoral quota (Wahlzahl), that 
is, the number of valid ballots in a voting district divided by the 
number of parliamentary seats allotted to it. The vote tallying proce- 
dures established by the new law mean that about ninety parliamen- 
tary seats come from regional voting districts, about sixty- five from 



187 



Austria: A Country Study 

provincial voting districts, and roughly twenty-five from the fed- 
eral level. All persons aged nineteen and over by January 1 of the 
year in which the election is held are eligible to vote. Voter partici- 
pation has traditionally been very high. In national elections, it 
has fallen below 90 percent only once (in 1990, when it stood at 
86 percent). Voting always takes place on a Sunday. 

Political Dynamics 

Between the end of World War II and the late 1980s, when some 
new trends became evident, Austria's political system seemed sta- 
ble and unchangeable. Most political scientists considered Austria 
a classic case of constitutional democracy, that is, a political sys- 
tem in which cohesive social groups are closely identified with po- 
litical parties. According to this theory, Austrian politics, business, 
and society in general were decisively shaped by the influence of 
three major social camps, or subcultures {Lager) — the socialist, the 
Catholic-conservative, and the German-nationalist. 

The most important factors in determining to which subculture 
a person belonged were geographic location (rural or urban), 
socioeconomic status, and professional occupation. The socialist 
camp had its basis in the urban working class of Vienna and other 
cities and in the intellectual class. The Catholic-conservative camp 
had its traditional base in the small towns and farming communi- 
ties of Austria and was almost exclusively Roman Catholic. The 
German-nationalist camp was smaller than the other two subcul- 
tures and was founded on the enthusiasm for union with Germa- 
ny that was prevalent during the years of the First Republic 
(1918-38). A high percentage of its members came from white- 
collar professions. 

Austria's subcultures provided their members with a self- 
contained milieu in which to pursue their lives and a variety of 
occupations. In addition to the political parties aligned with the 
Lager, each camp featured professional and trade organizations that 
played an important role in party politics and in society as well. 

This traditional system has continued into the 1990s. In 1993, 
in the socialist camp, the key organizations affiliated with the SPO 
were the Group of Socialist Trade Unionists (Fraktion Sozialisti- 
scher Gewerkschaftler — FSG), the Free Business Association of Aus- 
tria (Freier Wirtschaftsverband Osterreichs — FWB), and the SPO 
Farmers (SPO-Bauern). In the Catholic-conservative camp, the 
chief organizations of the OVP were the League of Austrian Work- 
ers and Salaried Employees (Osterreichischer Arbeiter- und 
Angestelltenbund — OAAB), the League of Austrian Business (Oster- 
reichischer Wirtschaftsbund — OWB), and the League of Austrian 



188 



Government and Politics 

Farmers (Osterreichischer Bauernbund — OBB). The German- 
nationalist camp, which is represented by the FPO, had only one 
auxiliary organization of note as of 1993, the Circle of Free Busi- 
ness Persons (Ring Freiheitlicher Wirtschaftstreibender — RFW). 

A key source of influence for the professional and trade organi- 
zations is their control of the chambers of agriculture, commerce, 
and labor. In the Austrian corporatist system, the chambers are 
assigned responsibility for implementing certain aspects of economic 
laws and regulations. Moreover, membership in the chambers is 
obligatory for persons employed in a wide range of occupations. 
Thus, the professional and trade organizations and the chambers 
are assured a large amount of influence in the public realm. The 
OVP dominates the Chamber of Agriculture through the OAAB 
and the Chamber of Commerce through the OWB. The SPO has 
a controlling influence in the Chamber of Labor through the FSG. 

The Austrian system of interests was dominated by the socialist 
and Catholic-conservative camps for virtually the entire postwar 
period. During the early years of the Second Republic, politicians 
of the SPO and OVP were adamant about the need for political 
consensus and compromise. One overriding reason for the emer- 
gence of a system designed to avoid conflict was the negative ex- 
perience of the 1930s, when the political parties clashed so 
vehemently that they ended up fighting a short civil war in 1934. 
During the period of Nazi rule, many Austrian politicians found 
themselves imprisoned alongside their political opponents. This 
shared fate convinced the country's political elite of the impera- 
tive for consensus in postwar Austria. From 1945 to 1966, the coun- 
try was ruled by the grand coalition formed by the OVP and the 
SPO, an astonishing duration of a series of governments composed 
of Austria's two main political competitors. 

The cumulative effect of a variety of changes in Austrian socie- 
ty in the postwar era has led many political scientists to conclude 
that the strength of the political camps, or Lager, has weakened sig- 
nificantly. A major shift in the way people earn their livelihood — 
a decline in farming and manufacturing and a growth in the ser- 
vices sector — has weakened the hold of the Lager on voters. An 
increasingly secularized society has lessened the influence of the 
Roman Catholic Church. An increased sense of Austria's existence 
as a nation (up from less than 50 percent in the mid-1960s to 74 
percent in one poll in 1990) has reduced the political potency of 
pan-Germanism. And the growth of the suburbs and the transfor- 
mation of rural areas by tourism have reduced the homogeneity 
of traditional SPO and OVP enclaves. 



189 



Austria: A Country Study 



The weakened hold of the Lager on Austrian society and politics 
has created opportunities for smaller parties. A 1990 poll showed 
that only 50 percent of respondents claimed some kind of identifi- 
cation with a political party; a mere 20 percent claimed strong iden- 
tification. In the 1960s and 1970s, similar polls had shown that 
more than 30 percent of Austrians identified closely with a party. 
Services- sector, or white-collar, employees were often part of a block 
of so-called floating voters who did not identify with a particular 
party. This block can be the key to an electoral victory for the party 
that wins its votes. 

The propensity toward what political scientists call electoral 
dealignment, that is, the breakdown of long-standing voter loyal- 
ties, was bound to have effects on Austrian voting behavior, and 
by 1986 the first signs of change were evident. In the parliamen- 
tary election of that year, the combined vote for the OVP and SPO 
fell to 84 percent, the first time since 1962 that it had dropped be- 
low 90 percent (see table 13, Appendix). The party benefiting the 
most from the losses by the major parties was the FPO, which dou- 
bled its vote. Moreover, for the first time ever, members of the 
Green political movement entered parliament. 

The trend away from the dominance of the Lager system con- 
tinued in the next parliamentary election in 1990, but this time 
it was the OVP alone that bore the brunt. Its share of the vote 
declined from 41 .3 to 32. 1 percent, a massive loss by the standard 
of Austria's ultrastable political system. The FPO had another strik- 
ing success, and the environmentalists lost some votes but gained 
two seats in the Nationalrat. 

Although the 1990 election did not lead to a change in govern- 
ment (because the OVP and SPO had renewed their grand coali- 
tion in 1987), it nevertheless marked a watershed in Austrian 
political history. For the first time in the Second Republic, the status 
of the OVP as a major party was placed in doubt. Whereas in the 
1986 election the OVP received only 88,000 fewer votes than the 
SPO, in 1990 the difference ballooned to more than 500,000. Un- 
der its colorful leader, Jorg Haider, the FPO was changing the Aus- 
trian party system from one dominated by two parties to one with 
multiparty possibilities. 

The Social Democratic Party of Austria 

The Social Democratic Party of Austria (Sozialdemokratische 
Partei Osterreichs — SPO), until 1991 known as the Socialist Party 
of Austria (Sozialistische Partei Osterreichs — SPO), has its roots 
in the original Social Democratic Workers' Party (Sozialdemokra- 
tische Arbeiterpartei— SDAP), founded in 1889 by Viktor Adler, 



190 



Government and Politics 



a young doctor. The SDAP supported revisionist Marxism and 
the use of democratic methods to establish working-class rule in 
a democratic government. The SDAP was responsible for push- 
ing through universal voting rights for men in 1905 and for ex- 
tending the same for women in 1919. From 1934 to 1945, during 
the regimes of Engelbert Dollfuss (1932-34) and Kurt von Schusch- 
nigg (1934-38) and the takeover by the Nazis, the SDAP was out- 
lawed. In 1945 it was reconstituted as the Socialist Party of Austria. 
In 1991 the party readopted the designation "Social Democratic." 

Moderates such as Karl Renner and Adolf Scharf, each of whom 
eventually served as president of the Second Republic, led the post- 
war party (see table 14, Appendix). Their primary interests lay 
in increasing SPO power in the coalition government rather than 
in fostering Marxism. Between 1945 and 1957, the party support- 
ed democratic practices and intraparty cooperation, programs for 
higher wages and lower food prices, and increased government 
spending on social programs. 

The election of Bruno Pittermann as party chairman in 1957 
marked the beginning of major policy changes. The party had a 
strong following among industrial workers, but party officials want- 
ed to expand SPO membership to the middle class and white-collar 
workers and to soften the party's anticlerical position in order to 
become acceptable to Roman Catholics. These changes were ex- 
pressed in a new party program adopted in 1958. The program 
claimed that the SPO was "the party of all those who work for 
a living," and it stated the party's opposition to communism and 
fascism. 

The late 1960s brought more changes in party doctrine. A new 
economic program in 1967 constituted a shift from concern for the 
distribution of wealth to concern for economic growth, including 
increasing foreign investment in Austria. Cultural and social re- 
forms were demanded, and emphasis was placed on attending to 
the needs of young people. In line with its appeal to youth, the 
party supported a plan to shorten the term of military service. 

Under Bruno Kreisky, who became chairman of the SPO in 
1967, the party continued its move toward the center of the ideo- 
logical spectrum. Although party platforms continued to refer to 
the classless society as an ideal, the SPO was careful to distinguish 
its brand of socialism from the centralized, inefficient version of 
Eastern Europe and the Soviet Union. The party program of 1978 
stressed the four principles of freedom, equality, justice, and solidar- 
ity. Central to the SPO's philosophy was a guarantee for all Austri- 
ans of freedom from fear, hunger, exploitation, and unemployment. 



191 



Austria: A Country Study 



The freedom to pursue wealth had to be balanced by the govern- 
ment's guarantee of equal opportunity and social justice. 

Under Kreisky the SPO triumphed at the polls in 1970, 1971, 
1975, and 1979, and between 1971 and 1983 the party enjoyed 
an absolute majority in parliament. The Kreisky governments laid 
great emphasis on improving the social welfare system and achieving 
full employment. The Kreisky era also featured the flourishing of 
the technocrats — SPO politicians successful in business and bank- 
ing whose lavish life- styles seemed incongruous in a party supposed 
to represent the interests of labor. In the parliamentary election 
of 1983, the SPO lost its absolute majority, and Kreisky decided 
to retire from politics rather than preside over a coalition govern- 
ment. Fred Sinowatz, Kreisky' s minister for education, was cho- 
sen as chancellor in a coalition government with the FPO. The 
Sinowatz era, from 1983 to 1986, proved to be a short interreg- 
num and was not distinguished by any great achievements (see Po- 
litical Developments since 1983, this ch.). 

Franz Vranitzky, born in 1937, became chancellor in June 1986 
when Sinowatz resigned after the SPO lost the presidential elec- 
tion to Kurt Waldheim. Vranitzky replaced Sinowatz as party chair- 
man in May 1988, becoming the first person from a working-class 
background to hold this position. Despite his working-class heritage, 
Vranitzky had had a successful career in banking before entering 
politics. 

Under Vranitzky the SPO moved to restore its image among 
rank-and-file members by improving its methods of intraparty com- 
munication. Computers and direct mail technology were used to 
gauge the opinions of members in the provinces, and efforts were 
made to improve recruiting techniques by means of recreational 
groups. In the area of government policy, Vranitzky stressed that 
limits on state activity were necessary, although he noted that health 
care and education were fields where market forces had to be 
regulated. 

Vranitzky displayed a more open attitude toward the question 
of privatizing government industries than Kreisky had. To a large 
extent, changes in this area were inevitable because of large losses 
in the state industrial sector that came to light in 1985. Vranitzky 
embraced the principle that privatization should be pursued if it 
would lead to greater operational efficiency. The press dubbed 
Vranitzky 's approach "pinstripe socialism." The policy has proven 
to be a responsible one and has been fairly popular with Austrians. 

In 1984 the SPO launched a program called Perspectives '90, 
designed to promote intraparty discussion on current issues. A 
major aim of the leadership was to show that the party was eager 



192 



Bruno Kreisky, 
federal chancellor, 1970-83 
Courtesy Austrian National 
Tourist Office, New York 



federal chancellor, 1986- 
Courtesy Austrian National 
Tourist Office, New York 



Franz Vranitzky, 



to listen to grass-roots concerns. A series of nationwide debates even- 
tually led to the issuance of a draft document in 1986 that incor- 
porated the views of party members on issues such as the 
environment, controls on the development of technology, and 
democratization of society. Events that had embarrassed the party, 
such as the conflict over the Hainburg power plant in 1984 and 
Minister for Defense Friedhelm Frischenschlager's reception of 
Walter Reder in 1985, were also discussed (see Political Develop- 
ments since 1983, this ch.). 

An estimated 30,000 party members participated in the Perspec- 
tives '90 meetings, which took place in 1,000 local groups. The 
success of this project led the SPO to stage the Congress for the 
Future in Vienna in the summer of 1987, where 400 of the party's 
top leaders and intellectual luminaries discussed the outlook for 
social democracy. It was agreed that the SPO needed to formulate 
an alternative to the neoconservatism of the 1980s that would al- 
low for greater codetermination in the workplace but also avoid 
the pitfalls of too much state control. After the success of this 



193 



Austria: A Country Study 

conference, the SPO began planning another that would produce 
a Social Democratic Manifesto for the Year 2000. 

Membership in the SPO is direct (unlike the OVP, where a per- 
son joins an organization affiliated with the party). SPO's mem- 
bership grew rapidly in the postwar period — from 360,000 members 
in 1946 to its peak of nearly 720,000 members in 1979. With the 
loosening of the grip of the Lager on Austrian society, the SPO's 
membership has declined slightly. In the early 1990s, it was esti- 
mated at 700,000. 

Party organization remained centralized as of the early 1990s. 
The main links between rank-and-file members and party leaders 
are the activists known as Vertrauenspersonen, who personally collect 
annual membership dues. At the local level, the SPO is represent- 
ed by almost 4,000 groups in villages and towns. Every two years, 
the SPO holds a federal conference that elects the party executive, 
which has sixty-five members. Because of the executive's unwieldy 
size, a smaller group, known as the presidium, is selected from 
it and actually conducts most party business. 

Delegates to the federal conference are drawn from the various 
suborganizations of the party. The party has two youth organiza- 
tions, the Young Generation (Junge Generation — JG) and the So- 
cialist Youth of Austria (Sozialistische Jugend Osterreichs — SJO). 
The Group of Socialist Trade Unionists (Fraktion Sozialistischer 
Gewerkschaftler — FSG) sends fifty- two delegates to the conference. 
There is also a Women's Committee, which has representatives 
from each province. Over the years, women have consistently made 
up one-third of the SPO's membership. In 1985 the federal con- 
ference passed an amendment providing for greater representation 
of women in the party and larger numbers of female candidates. 
Progress toward this goal has been slow, however, and in 1989 only 
eleven of the SPO's deputies in the Nationalrat were female. 

SPO candidates for parliamentary elections are determined by 
the Party Council, whose members come from the nine provincial 
party organizations. The party executive and the heads of the nine 
provincial parties have an input into the selection process. Roughly 
one-fifth of the places are reserved for high-ranking party officials, 
whose presence in the Nationalrat is considered imperative. 

The Austrian People's Party 

The Austrian People's Party (Osterreichische Volkspartei — 
OVP) was created in Vienna in 1945 by leaders of the former Chris- 
tian Social Party (Christlichsoziale Partei — CSP). The founders 
of the OVP made sure that the new party was only loosely tied 
to the Roman Catholic Church, unlike its predecessor. The OVP 



194 



Government and Politics 



emerged as a conservative, democratic party based on Christian 
values that sought to include diverse interests. From 1945 to 1966, 
OVP politicians filled the post of chancellor in a series of grand 
coalition governments with the SPO (from 1945 to 1947, KPO 
members were also in the cabinet). From 1966 to 1970, the OVP 
ruled alone and thereafter entered a long period of opposition to 
the SPO, which ended in early 1987 when the two parties formed 
a new coalition government (see table 15, Appendix). 

The OVP periodically has revised its party program. During the 
1945-55 period, the party advocated low taxes, reduced govern- 
ment expenditures, a balanced budget, and low wage increases. 
The OVP favored a limited government role in the economy. Af- 
ter much debate, in 1965 the party adopted the Klagenfurt 
Manifesto, which referred to the OVP as an "open people's party" 
of the "new center. ' ' The manifesto laid less emphasis than previ- 
ous ones on the priority of personal property in a democracy. It 
also stressed the importance of expanding economic welfare and 
educational opportunities for all social groups. 

After suffering losses in the 1970 parliamentary election, the OVP 
entered the opposition for the first time. A wide-ranging discus- 
sion of principles took place at all levels of the party. The outcome 
of this process was the 1972 Salzburg Program, which described 
the OVP as a "progressive center party" dedicated to integrating 
Austria's different social groups. The program reaffirmed the 
party's commitment to a free and independent country, a multiparty 
democracy, and a social market economy combining free enter- 
prise and some government intervention. As of 1993, the Salzburg 
Program had not been replaced as the basic statement of OVP ide- 
ology. 

The OVP had a less centralized form of party organization than 
the SPO as of the early 1990s. At the top is the party presidium, 
composed of the party chairman, the chancellor and vice chancel- 
lor (if they are members of the OVP), the general secretary, up 
to six deputies to the chairman, the leader of the party's parliamen- 
tary faction, and eight additional members drawn from the 
provinces and interest groups affiliated with the party. The party 
holds a national conference at least once every three years. Roughly 
600 delegates from the provinces and the party's auxiliary organi- 
zations attend the conference, which elects the party chairman, the 
deputies, and the general secretary. 

The auxiliary organizations play important roles in the OVP's 
internal workings. The key organizations are the League of Aus- 
trian Workers and Salaried Employees (Osterreichischer Arbeiter- 
und Angestelltenbund — OAAB), the League of Austrian Business 



195 



Austria: A Country Study 

(Osterreichischer Wirtschaftsbund — OWB), and the League of Aus- 
trian Farmers (Osterreichischer Bauernbund — OBB). These or- 
ganizations represent the OVP in the chambers of labor, commerce, 
and agriculture, respectively. Until 1980 the leaders of these three 
groups were automatically placed on the party presidium. However, 
this practice was abandoned after many party members complained 
about undue influence by interest groups over OVP affairs. This 
reform was yet another indication of the erosion in the influence 
of the traditional Lager over Austrian society. 

The majority of OVP members acquire party membership in- 
directly via one of the auxiliary organizations. Because of indirect 
membership, it is difficult to arrive at a precise figure for total mem- 
bership in the OVP. At the beginning of the 1990s, the combined 
membership of the three leagues was about 800,000. Adding to 
this figure members of the women's, youth, and senior organiza- 
tions, a total membership of 1.2 million was attained. However, 
the OVP's actual membership was about one-third smaller than 
this because many individuals belonged to more than one league 
or subgroup. 

The independence of auxiliary organizations affiliated with the 
OVP means that there is a fairly high degree of intraparty disagree- 
ment over policies compared with the SPO and other Austrian 
parties. One major cleavage exists between the OAAB, which 
represents the interests of working people in the OVP, and the 
OWB, which speaks for business interests. The farmers' group, 
the OBB, has clashed with the OWB over the issue of whether Aus- 
tria should join the European Union (EU — see Glossary). Ten- 
sions between the wings of the party remained high even in the 
early 1990s, despite numerous party wide discussions of ideology 
designed to bring about consensus. Some experts believe that the 
cohesion of the Catholic-conservative Lager will be endangered if 
the OVP does not achieve a higher degree of party unity than that 
prevailing in 1993. 

Alois Mock, who comes from Lower Austria, one of the party's 
strongholds, held the position of party chairman from 1979 to 1989. 
As the party struggled with declining vote totals, many in the OVP 
concluded that his uncharismatic leadership style was a hindrance 
to a recovery at the polls. Mock withstood pressure for his ouster 
after the party's poor performance in the national election of 1986, 
and his stature temporarily increased when he became vice chan- 
cellor and foreign minister in the coalition government formed in 
early 1987 with the SPO. Discontent with Mock resurfaced quickly, 
however, and there were also disturbing signs of party disunity. 



196 



Government and Politics 



After the heavy losses incurred by the OVP in the provincial elec- 
tions in the spring of 1989, Mock's opponents pressed again for 
his resignation. At an emergency summit in April 1989, Mock was 
finally convinced to step down as party chairman. He also relin- 
quished the post of vice chancellor. His replacement in both posi- 
tions was Josef Riegler, a member of the OBB from Styria. 

Riegler had served as agriculture minister between 1987 and 1989 
and was known as a consensus seeker who would be able to get 
along well with the SPO. Riegler was also interested in develop- 
ing new approaches to environmental problems, and many in the 
party hoped this would help the OVP regain some of the voters 
who had deserted it for the environmental, or Green, parties. 

However, the devastating results of the October 1990 national 
election, in which the OVP's share of the vote declined by 9 per- 
cent, proved that the party's problems went much deeper than who 
held the post of party chairman. In May 1991, Riegler decided 
not to run again for the party chairmanship. Erhard Busek, a well- 
known OVP politician who had headed the party's Vienna branch 
between 1976 and 1989, won the election to succeed Riegler. At 
the same time, the party conference voted to reduce the number 
of the chairman's deputies from six to two, a sign that party mem- 
bers wanted to curb the influence of the interest groups. 

The Freedom Party of Austria 

The Freedom Party of Austria (Freiheitliche Partei Osterreichs — 
FPO) was founded in 1956 by Anton Reinthaller, who had served 
in the national socialist government of Arthur Seyss-Inquart formed 
in collaboration with Hitler after the Anschluss in 1938. Anticleri- 
cal and pro-German, the FPO was the party of persons who were 
uncomfortable with the domination of Austrian politics by the "red- 
black" (socialist-clerical) coalition governments of the SPO and 
OVP. The party had liberal and nationalist wings, which frequently 
disagreed over strategy. Although the FPO was not an extremist 
party, it attracted many former Nazis with its philosophy that Aus- 
trians should think of themselves as belonging to a greater Ger- 
man cultural community. 

The FPO's stress on nationalism made it an atypical liberal party. 
Nevertheless, in 1979 the FPO was admitted to Liberal Interna- 
tional, the worldwide group of liberal parties. The FPO's ideology 
emphasized the preservation of individual liberties in the face of 
the growth of the state's power. The party enthusiastically endorsed 
free enterprise and individual initiative and opposed a larger role 
for the state in the ownership of enterprises. The FPO was also 



197 



Austria: A Country Study 

against the socialist idea of striving for greater equality among 
socioeconomic groups. 

After Reinthaller's death in 1958, Friedrich Peter became the 
head of the FPO. Under his leadership, the liberal wing increased 
its influence, and ties to the SPO were developed. However, the 
FPO remained a minor party with a limited opposition role in the 
parliament. Between 1956 and 1983, the FPO's share of the vote 
stagnated between 5.0 and 7.7 percent. After the election of 1970, 
the FPO struck a deal with the SPO, which promised electoral re- 
form in exchange for the FPO's support of Kreisky's minority 
government. The ensuing changes in the electoral laws helped the 
FPO increase its representation in parliament in subsequent elec- 
tions, despite the fact that its vote totals did not rise at the same 
time. Peter's hope that he could make the FPO attractive to the 
SPO as a coalition partner was dashed by Kreisky's success in ob- 
taining absolute majorities in the elections of 1971, 1975, and 1979. 
It was only in 1983, when the SPO lost its majority, that it turned 
to the FPO to form a government. The FPO's brief three-year ex- 
perience in power in the SPO-FPO coalition of 1983-86 was mostly 
frustrating, as the government stumbled from one crisis to the next. 

Norbert Steger was FPO party chairman between 1980 and 1986. 
A member of the party's liberal wing, Steger served as vice chan- 
cellor and minister for trade in the SPO-FPO coalition. He was not 
a charismatic politician, and, as the coalition's troubles mounted, 
he began to lose support among the party's rank and file. At an 
FPO convention in the spring of 1986, Jorg Haider, leader of the 
Carinthian branch of the party, launched a successful coup against 
Steger and became the new chairman. 

Haider, born in 1950, is a handsome, dashing figure whose self- 
confidence strikes many observers as verging on arrogance. He 
comes from the nationalist wing of the party and has stirred con- 
troversy on many occasions by his remarks about Austria's proper 
place in the German cultural community. On one occasion in 1988, 
Haider referred to Austria as "an ideological deformity." 

Since Haider took control of the FPO in 1986, the party has 
achieved dramatic gains at the polls in both national and provin- 
cial elections. In the March 1989 provincial election in Carinthia, 
the FPO displaced the OVP as the second strongest party, and 
Haider was elected governor of the province with votes from the 
OVP. This election marked the first time that a provincial gover- 
nor was not from either of the two major parties. Haider's term 
as governor was cut short in June 1991 by the controversy unleashed 
by his remark during a parliamentary debate that the Third Reich's 
employment policy was a positive model. The OVP and SPO joined 



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Government and Politics 



together to pass a vote of no confidence against Haider, marking 
the first time in the history of the Second Republic that a gover- 
nor was forced to step down. Haider did not allow this setback to 
create challenges to his leadership of the party. In three provincial 
elections in the fall of 1991, Haider led the FPO to outstanding 
showings, proving that Austrian voters were increasingly ready to 
vote for alternatives to the two major parties. 

A less charitable interpretation of the FPO's rise under Haider 
is that Austrian politics has taken a turn to the right. At times in 
his career, Haider has given his critics ample reason for accusing 
him of neo-Nazi tendencies. He has frequently pandered to the 
sentiments of the far right, but his everyday political discourse is 
more moderate. Haider tailors his remarks to his audiences, and 
he resorts to the rhetoric of right-wing populism in order to in- 
spire the conservative nationalists in the FPO. 

A major element in Haider's prescriptions for Austria is his desire 
to cut down drastically on the number of foreigners allowed to live 
in the country. Haider consistently argues that immigration is ex- 
cessive and is causing serious problems for Austrian citizens in the 
areas of jobs and housing. Haider's campaign against foreigners 
was a major reason for the passage of a 1991 law that decreed that 
foreign workers could not make up more than 10 percent of the 
work force. In 1993 this ceiling was reduced to 9 percent when a 
new law, the Resident Alien Law, went into effect. Early in the 
same year, Haider sponsored a referendum to further tighten the 
control over the number of foreigners in Austria. Although he got 
only half of the 800,000 signatures he sought, the language Haider 
used in his campaign was extreme enough to cause large counter- 
demonstrations. 

The tensions between Haider and the liberal wing of the party 
caused five FPO members of the Nationalrat to leave the party in 
early 1993 and form a new party, The Liberal Forum (Das Li- 
berate Forum). Led by the FPO's 1992 presidential candidate, 
Heide Schmidt, the group won seats in the Upper Austria provin- 
cial elections of May 1993. The new party was also recognized 
by Liberal International, which was expected to expel Haider's FPO 
from its ranks in 1994 because it advocated policies incompatible 
with traditional European liberalism. 

Despite these setbacks, Haider is expected to remain a formida- 
ble force in Austrian politics. His sense for the issues that trouble 
many voters and his ability to enunciate views too extreme for the 
larger parties will likely win him a substantial following during the 
rest of the 1990s as the country struggles to adapt to post-Cold War 
conditions. 



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Austria: A Country Study 

Membership in the FPO is direct (there is no tradition of join- 
ing an organization affiliated with the party, as with the SPO). 
The party's membership grew from 22,000 in 1959 to 40,000 in 
1990. The membership- voter ratio declined as the party made dra- 
matic gains at the polls. The FPO's share of the vote in national 
elections tripled between 1983 and 1990, when it achieved 16.6 
percent. The FPO has a strong base of support in the provinces 
of Carinthia and Salzburg. The party draws much of its support 
from the middle class, salaried employees, and the self-employed. 
More than 60 percent of its voters are under the age of forty-four, 
and many are well educated. The party has few auxiliary organi- 
zations, in comparison with the OVP and the SPO. In addition 
to an organization for people in business, it has groups for aca- 
demics, students, and retired persons. The FPO's party structure 
is decentralized, and provincial organizations play an important 
role in party affairs. The party chairman, who is elected by the 
party conference, chooses the party manager and general secre- 
tary. The general secretary acts as a liaison between federal lead- 
ers and provincial organizations. 

The Green Parties 

Another clear sign that the Austrian party system is loosening 
up was the emergence during the early 1980s of organized environ- 
mental, or Green, parties. A major catalyst in the birth of the Green 
movement in Austria was the narrow defeat of the November 5, 
1978, national referendum on nuclear energy. The Kreisky govern- 
ment, seeking to build a nuclear power plant in Zwentendorf near 
Vienna, decided to let the people decide on the question of nuclear 
energy (see Domestic Issues, ch. 1). 

The victory of the antinuclear forces encouraged environmen- 
tal activists to run in local elections, and in 1982 two national Green 
parties were formed. The more moderate of the two, the United 
Greens of Austria (Vereinigte Griine Osterreichs — VGO), had a 
strong commitment to working within the existing political system 
to change environmental policies. The Alternative List of Austria 
(Alternative Liste Osterreichs — ALO), founded in 1982 on the fourth 
anniversary of the Zwentendorf referendum, was more willing to 
challenge the political status quo. In addition to championing radi- 
cal changes in environmental policy, the ALO also advocated a 
guaranteed national income, a thirty-five-hour workweek, and great- 
er government ownership in certain areas of the economy. 

The prospects of the Green parties are limited by their frequent 
inability to form alliances for the purpose of contesting elections. 
When the ALO and VGO have campaigned on a common ticket, 



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they usually have won seats in parliament. In 1983, the first na- 
tional election in which the Green parties participated, the two 
groups ran on separate lists, and both failed to gain representa- 
tion in the Nationalrat. The Green cause received a strong boost 
in 1984 from the confrontation between the SPO-FPO government 
and environmental activists opposed to the plan to build a hydro- 
electric plant in a wetland forest at Hainburg in eastern Austria. 
The government backed down from its plan, and the incident led 
to an increase in support for the Green parties from disillusioned 
SPO voters, intellectuals, and others with strong views on the en- 
vironment. 

Green activist Freda Meissner-Blau ran in the May 1986 presi- 
dential election, taking a surprising 5.5 percent of the vote, which 
necessitated a runoff between the OVP and SPO candidates. 
Encouraged by this showing, the ALO and VGO, after long nego- 
tiations, agreed to participate in the November 1986 national 
election on a single list, named the Green Alternative — Freda 
Meissner-Blau List. The Green Alternative took 4.8 percent of the 
vote and won eight seats in parliament. This marked only the 
second time in the history of the Second Republic that a fourth 
party had entered the Nationalrat. (The KPO had been in the 
parliament between 1945 and 1959.) The harmony between the 
two groups was short-lived, however, as they clashed over how to 
divide the federal financing that became available to the Green 
movement. In the 1990 national election, the VGO put up its own 
list of candidates, and the ALO ran as the Green Alternative/Greens 
in Parliament (Griine Alternative/Grime in Parlament — GAL). The 
VGO polled only 1 .9 percent of the vote and failed to win any seats. 
The GAL took 4.5 percent of the vote and increased the number 
of Green deputies to ten. 

As of the early 1990s, the future of Green politics in Austria re- 
mained uncertain because of the strong differences between the 
GAL and VGO over political strategy. The VGO was committed 
to developing a centralized party structure along the lines of the 
OVP and SPO, while the GAL preferred to allow complete au- 
tonomy for its affiliated organizations in the provinces. There were 
also questions about the longevity of the Greens' appeal to voters. 
Studies indicated that only 50 percent of Green voters had close 
ties to a Green party, and roughly 35 percent of Green votes came 
from floating voters who had abandoned the two major parties. 
However, many Austrians felt a lack of confidence in the abilities 
of the OVP and SPO to fashion constructive policies, and as long 
as this doubt persists, the Green parties will have opportunities to 
elect deputies to parliament. 



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Austria: A Country Study 

Political Developments since 1983 

In 1983 a thirteen-year period of single-party rule by the SPO 
came to an end. The period had been dominated by Bruno Kreisky, 
who served as chancellor for the entire time (see The Kreisky Years, 
1970-83, ch. 1). With Kreisky as its leader, the SPO had emerged 
from the election in 1970 as the strongest party. This election 
marked a turning point in Austrian history because never before 
had a socialist party been given such a mandate by the voters. The 
outcome was conclusive proof that most Austrians had lost their 
fear of the SPO's being too leftist to govern alone. 

SPO-FPO Coalition, 1983-86 

In the election of 1983, the SPO lost its absolute majority in the 
Nationalrat, although it remained the largest party (see End of the 
Kreisky Era, ch. 1). Kreisky fulfilled his pledge to resign as chan- 
cellor if the SPO lost its undisputed position in parliament. Fred 
Sinowatz, a rather colorless figure who had been minister for edu- 
cation under Kreisky, was selected as the new chancellor. The SPO 
decided to form a coalition with the FPO, marking the first time 
ever that the FPO had joined the government. Norbert Steger, the 
moderate chairman of the FPO, was named vice chancellor and 
minister for economic affairs, and other members of his party be- 
came minister for defense and minister for justice. 

The SPO-FPO coalition lasted only three years and was not 
very productive. It faced a series of crises that never allowed it to 
become firmly established. Although the coalition had made 
progress on environmental protection a high priority, its decision 
to build a hydroelectric plant at Hamburg in a wetland forest east 
of Vienna provoked a storm of opposition from environmental ac- 
tivists. In the end, the government decided to cancel the project 
(see The Green Parties, this ch.). 

The coalition's image received another black mark in 1985 when 
FPO Minister for Defense Friedhelm Frischenschlager staged a wel- 
coming ceremony at the airport for Walter Reder, a former Waffen 
SS member who had been serving a life sentence for executing 
civilians during World War II before being pardoned by the 
Italians. Some SPO members of the cabinet threatened to resign 
over this affair, but Frischenschlager was allowed to remain in his 
post. This incident hurt the SPO's standing among its own mem- 
bers, as well as among independent voters. 

Austria received further unpleasant jolts in 1985. First came the 
news that diethylene glycol, a chemical used in antifreeze, had been 



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Government and Politics 



added to Austrian wines in potentially lethal amounts. The wines 
affected came from Burgenland, the home province of Chancellor 
Sinowatz. Even more damaging to the country's self-image, 
however, was the crisis in the state-run industrial sector that came 
to light at roughly the same time. The government announced that 
it had uncovered a financial scandal at the United Austrian Iron 
and Steel Works (Vereinigte Osterreichische Eisen- und 
Stahlwerke — VOEST; commonly known as VOEST-Alpine) in 
Linz. Public funds were required to cover large losses incurred 
through risky and unauthorized speculation in oil ventures. 
Moreover, the entire state industrial sector required streamlining, 
and jobs had to be cut. 

The method of staffing these industries was a prime example of 
the OVP and SPO's Proporz system, which created fiefdoms in which 
political affiliations were the main criteria for filling high-level 
management positions. The crisis in this sector of the economy re- 
vealed that the Kreisky governments had been guilty of serious mis- 
management. The confidence of the SPO in particular was shaken 
as it faced the need for privatization and layoffs. The government 
abolished the Proporz system at VOEST-Alpine and appointed new 
management to rectify the problems. 

Election of Kurt Waldheim as President 

In 1986 Austrians prepared to elect a new president. The race 
featured two major candidates, Kurt Waldheim for the OVP and 
Kurt Steyrer for the SPO, plus two less well-known candidates, 
a Green party activist and a former member of the FPO. Wald- 
heim was one of Austria's best known citizens by virtue of his having 
served two terms as secretary general of the United Nations in the 
1970s. Waldheim had joined the OVP only in early 1985 when 
the party decided to offer him its presidential candidate's spot. He 
was presented to the voters as "the man the world trusts." Steyrer 
was the minister for health and the environment in the SPO-FPO 
government. His campaign stressed his role as a family man and 
a humanitarian. 

The 1986 presidential campaign would have taken place without 
many people outside Austria taking note of it, except that it focused 
on an issue that proved extremely sensitive for audiences inside 
and outside of the country. In March 1986, Profit, a Vienna-based 
magazine specializing in investigative reporting, began to publish 
a series of articles claiming that Waldheim had left out crucial de- 
tails about his service in the army, the German Wehrmacht, dur- 
ing World War II. In an autobiography published a few months 
before, Waldheim had glossed over most of his wartime service, 



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Austria: A Country Study 

alleging that he had spent much of the war in Vienna studying law 
while recuperating from wounds he had received. Profit, foreign 
newspapers, and the World Jewish Council in New York unearthed 
evidence that Waldheim had spent considerable time on duty in 
the Balkans and in Salonika, Greece. The German army had car- 
ried out brutal occupations of these areas, murdering thousands 
of Yugoslav partisans and deporting Greek Jews to the concentra- 
tion camps in Central Europe. Waldheim, while not accused of 
personally participating in any atrocities, made the unbelievable 
claim that he had not heard of any misdeeds by the German armed 
forces in the Balkans or Greece until he had read the current 
newspaper accounts. He stuck by his account that he had been on 
leave when atrocities were committed, and he defended himself by 
saying he "had only done his duty as a soldier." 

As the scrutiny of Waldheim intensified, Austrians became pola- 
rized over whether to defend or criticize him. Many older Austri- 
ans, particularly those who had served in the German army, agreed 
with his self-defense that he had merely done his duty in a war 
that Austria had not wished for. Others became more suspicious 
of Waldheim when documentary evidence was produced suggest- 
ing that he may have joined the Nazi Party to further his chances 
for a diplomatic career. The presidential campaign degenerated 
into a mudslinging affair, and the OVP launched attacks against 
the character of the SPO candidate. 

Despite the furor surrounding him, on May 4, 1986, Waldheim 
outpolled Steyrer by 49.7 to 43.7 percent. He fell only 16,000 votes 
short of the absolute majority required for victory, and thus a runoff 
between the two top candidates was scheduled for June 8. Wald- 
heim won the runoff handily, garnering 54 percent of the vote. 
Steyrer' s candidacy had been handicapped by his membership in 
a government burdened by financial mismanagement of state in- 
dustries and other scandals. Waldheim benefited from a wave of 
sympathy from certain segments of the Austrian electorate, who 
viewed him as a victim of unfair attacks. 

The Waldheim presidency proved to be a major burden for Aus- 
tria. In April 1987, after a one-year study of the matter by the Unit- 
ed States Department of Justice, the United States placed Waldheim 
on its ' 'watch list' ' of undesirable aliens. The department had con- 
cluded that there was "a prima facie case that Kurt Waldheim as- 
sisted or otherwise participated in the persecution of persons because 
of race, religion, national origin, or political opinion." Waldheim 
became the first active chief of state ever to be placed on the list 
of 40,000 subversives, terrorists, and criminals. Waldheim became 
isolated internationally and found support only from the Soviet 



204 



Government and Politics 



Union, some of the communist governments of Eastern Europe, 
and Arab states such as Jordan, one of the few countries he was 
to visit during his presidency. 

In June 1987, the Viennese branch of the SPO passed a resolu- 
tion calling for Waldheim to resign. Chancellor Vranitzky and Sino- 
watz, the chairman of the SPO, defended Waldheim, arguing that 
he had been elected democratically. Strains were beginning to 
appear within the OVP-SPO coalition over the affair, and some- 
how a resolution needed to be brought about. In an effort to achieve 
this resolution, the Austrian government announced that it would 
appoint an international panel of historians and human rights ex- 
perts to examine the whole matter. 

The panel presented its findings in February 1988. The panel 
found no direct evidence that Waldheim had participated in war 
crimes during his military service in the Balkans and Greece. 
However, it concluded that he must have had some knowledge that 
atrocities were taking place. Predictably, Waldheim took the panel's 
report as his exoneration, as did most OVP leaders. The presi- 
dent gave a speech in which he said he believed it to be in the best 
interests of Austria that he remain in office. 

The release of the panel's report came one month before the 
fiftieth anniversary of the Anschluss of March 1938. At a public 
commemoration of this event in Vienna, Vranitzky solemnly in- 
formed the Austrian people that it was time for all of them to face 
up to the fact that their country had been not only the first victim 
of Nazi aggression but also a participant in Hitler's military con- 
quests. Waldheim gave a television address in which he described 
the Holocaust as one of the greatest tragedies of history and ad- 
mitted that Austrians had played a role in it. He condemned fanati- 
cism and intolerance and expounded on Austria's dual role as victim 
and culprit. For Waldheim 's critics, it was a respectable perfor- 
mance, but woefully late. Austrian emotions had been rubbed raw 
by the Waldheim affair, but at least it presented Austrians with 
an opportunity to discuss openly issues that had effectively been 
taboo for fifty years. 

The National Election of 1986 and the Grand Coalition of 1987-90 

The election of Waldheim had a large impact on Austrian domes- 
tic politics as well. After Waldheim 's victory, Sinowatz, the SPO 
chancellor who had been perceived as ineffective, resigned, and 
the SPO turned to Franz Vranitzky to fill the top position. Vra- 
nitzky decided to dissolve the SPO-FPO coalition when the lead- 
ership of the junior party was usurped in September 1986 by 
Jorg Haider. Haider was prone to making controversial remarks 



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Austria: A Country Study 

about Austria's place in the greater German cultural identity, and 
Vranitzky had little hesitation in cutting the SPO's ties to the FPO 
under its new leader. This action led to a premature parliamen- 
tary election in November 1986. Pressures for an early election 
also came from the financial failures in the state industrial sector 
that had embarrassed the SPO-FPO government. 

The outcome of the election was a shock to both major parties, 
as the FPO attained its highest vote total since 1953, receiving 9.7 
percent. The SPO lost ten seats in the Nationalrat, dropping to 
eighty, and the OVP lost four, declining to seventy-seven. After 
lengthy negotiations, in early 1987 the two major parties decided 
to form a grand coalition for the first time since 1966. Vranitzky 
remained chancellor, and Alois Mock, leader of the OVP, became 
vice chancellor and foreign minister. The two parties agreed to split 
the remaining cabinet posts, with the Ministry for Justice going 
to a person with no party affiliation. Former Chancellor Kreisky 
complained loudly about Vranitzky 's giving the foreign ministry 
portfolio to the OVP, and he resigned as honorary chairman of 
the SPO in protest. 

The new grand coalition was not able to function in the cozy 
way the old grand coalition had because media scrutiny was much 
greater in the 1980s than it had been between 1945 and 1966. Fur- 
ther, one of the coalition's top priorities was to address the problems 
in the state industrial sector and the budget deficit in general. The 
government carried out job cutbacks and early retirement programs 
at VOEST- Alpine, the state-run iron and steel conglomerate, and 
also reduced subsidies to farmers. These policies hurt key interests 
of both parties' core constituencies, but OVP and SPO leaders saw 
little alternative to tackling these problems head on. Austrian po- 
litics had entered a new stage that was short on the optimism of 
the Kreisky era and focused on pragmatic and hard-headed solu- 
tions to economic problems. 

The OVP- SPO government benefited from improving economic 
conditions, especially from 1988 onward. Economic growth for the 
years 1988-90 averaged around 4 percent annually. Other economic 
indicators were also positive, with unemployment averaging around 
5 percent and inflation running at 2.5 percent. In the political realm, 
however, the coalition was plagued by numerous scandals involv- 
ing primarily high-ranking officials of the SPO. In late 1988 and 
early 1989, two of these officials were forced to resign for large- 
scale tax evasion. Chancellor Vranitzky, who had replaced Sinowatz 
as party chairman in May 1988, initially was hesitant to fire his 
friend Gunther Sallaberger, who had failed to pay taxes on SI. 8 
million (for value of the schilling — see Glossary). Pressure to remove 



206 



Government and Politics 



Sallaberger became intense after party members were shocked to 
learn that he was an example of a trend in which holders of multi- 
ple posts within the SPO were actually earning more money than 
the chancellor. 

An even larger scandal emerged when the SPO became embroiled 
in an insurance scandal centering on Udo Proksch, the notorious 
former owner of Demel's, Vienna's most famous coffee house and 
meetingplace for SPO bigwigs. A ship commissioned by Proksch, 
the Lucona, had sunk in 1977 with the loss of six crew members. 
Proksch claimed that the ship had been carrying a uranium process- 
ing plant, but documents describing the ship's cargo were found 
to have been forged, and Proksch was accused of deliberately sinking 
the vessel. The investigation into the affair moved at a snail's pace. 
By early 1989, a parliamentary committee that had been formed 
to look into the case began to focus on two leading SPO officials, 
Minister for Interior Karl Blecha and Leopold Gratz, the first presi- 
dent of the Nationalrat. 

The committee's investigations provided some of the most dra- 
matic political theater ever seen in the Second Republic. After tough 
cross-examinations of subordinate officials, the committee and the 
public began to suspect that Blecha had deliberately slowed up the 
Lucona investigation in the early 1980s. Blecha' s denials of any wrong- 
doing were unconvincing, and Vranitzky forced him to resign. 

Gratz, who had been foreign minister at the time the forged docu- 
ments relating to the Lucona 's cargo had arrived in Vienna, was 
suspected of even greater complicity in the affair. As the commit- 
tee did its work, it appeared increasingly clear that Gratz had cov- 
ered up important details of the affair to protect Proksch. Gratz 
resigned his position when, like Blecha, he had lost all support with- 
in the SPO. In the face of a very bleak ethical situation, Vranitzky 
could at least claim that he had acted relatively quickly to clean 
house. 

The Parliamentary Election of 1990 

The OVP and SPO approached the parliamentary election of 
1990 with trepidation. In 1989 the political landscape had been 
shaken by Haider's FPO, which had racked up impressive gains 
in provincial elections in Carinthia, Salzburg, and Tirol. Even 
though questions had been raised about Haider's honesty, he con- 
tinued to entice voters to leave the major parties. The FPO scored 
a spectacular success in Carinthia, where it displaced the OVP as 
the second largest party, and it caused the OVP to lose its abso- 
lute majority in Salzburg. 



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Austria: A Country Study 

In the October 1990 national election, the FPO again shocked 
the political establishment by increasing its share of the vote from 
9.7 to 16.6 percent. This gain came almost completely at the ex- 
pense of the OVP, whose share of the vote declined from 41.3 to 
32. 1 percent. The SPO's share of the vote remained essentially the 
same, which surprised everyone. The party, realizing that its strong 
suit was the popularity of Vranitzky, employed a new electoral 
strategy that probably explains its ability to avoid the OVP's fate. 
With Vranitzky as the top candidate in all nine electoral districts, 
the SPO urged voters to cast preference votes for Vranitzky, which 
could be done without selecting the SPO box on the ballot (these 
votes would count toward the SPO's total number of seats in 
the Nationalrat, however). A nonpartisan committee was organized 
to carry out this campaign, and it succeeded in attracting sup- 
port from sources that otherwise might not have voted for the 
SPO in the regular manner. Because of disagreements between the 
two Green parties, they did not run on a united ticket as they had 
in 1986. The Green Alternative/Greens in Parliament (Griine 
Alternative/Grime in Parlament — GAL), formerly known as the 
Alternative List of Austria, received 4.5 percent and increased its 
seats in the parliament from eight to ten. The United Greens of 
Austria (Vereinigte Griine Osterreichs — VGO) received only 1.9 
percent and won no seats. 

Given the antipathy that Vranitzky felt for Haider, there was 
no chance of a revival of an SPO-FPO coalition. After a period 
of negotiations, the SPO and OVP agreed to continue the grand 
coalition. Because economic conditions were much improved in 
comparison with 1986, the new coalition planned to focus on is- 
sues such as social welfare, health care, science, and research. 
Attention would also be given to reforming the country's electoral 
system and its chambers of commerce and labor. Increasing num- 
bers of Austrians regarded the former as unrepresentative and 
resented the latter' s requirement of compulsory membership. The 
coalition partners decided to upgrade the position of state secre- 
tary for women's affairs to full cabinet rank, and the new Minis- 
try for Women's Affairs was created to oversee these matters. 

Events of 1991-93 

The trend toward the dissolution of the two-party system was 
confirmed by the outcomes in four provincial elections held in 1991 . 
The FPO increased its share of the vote in all four elections, and 
in Styria and Upper Austria it tripled its vote to 15.4 and 17.7 
percent, respectively. In Vienna the FPO displaced the OVP as 
the second most powerful party in the provincial legislature, a 



208 



Government and Politics 



particularly embarrassing result for the OVP. The OVP lost ground 
in all four elections, while the SPO lost seats in three elections. 
With its showing in Vienna, the FPO became the second strong- 
est party in two of Austria's nine provinces, having achieved the 
same status in Carinthia in 1989, also displacing the OVP. 

In June 1991, President Kurt Waldheim announced that he 
would not seek reelection in 1992. OVP leaders were relieved that 
Waldheim had decided to retire from politics because they feared 
the eruption of another bitter controversy over his wartime record 
if he had chosen to run. Waldheim became the first incumbent Aus- 
trian president not to seek reelection. Initially, the OVP and SPO 
looked into the possibility of nominating a joint candidate for the 
1992 election. However, the two parties were unable to agree on 
a candidate, and in November 1991 they and the FPO each an- 
nounced separate candidates. The OVP selected Thomas Klestil, 
a career diplomat and former ambassador to the United States. 
The SPO candidate was Rudolf Streicher, head of the Ministry 
for National Industry and Transportation. The FPO candidate was 
Heide Schmidt, who was also third president of the Nationalrat. 
The Green candidate was the scientist Robert Jungk. 

No candidate was able to win an absolute majority in the first 
balloting on April 26, 1992. Streicher polled 41 percent, compared 
with Klestil' s 37 percent, but far ahead of Schmidt's 16 percent 
and Jungk's 6 percent. In the run-off elections four weeks later, 
when only the top two candidates were on the ballots, Klestil scored 
an easy victory over Streicher with 57 percent of the total vote. 
Controversy about his opponent's war record, a series of scandals 
connected to the SPO, and Klestil' s skill in dealing with the me- 
dia contributed to his easy victory in the second round of voting. 
Perhaps most important, however, was his career as a diplomat 
abroad, which had kept him out of politics (although he was an 
OVP member) and made him seem well suited for leading the coun- 
try into the post-Cold War era. 

The collapse of the Soviet empire and the former Yugoslavia in- 
creased the number of foreigners coming to Austria. The influx 
of asylum seekers and illegal immigrants posed a challenge to Aus- 
trian authorities. In 1992 and 1993, new laws went into effect that 
sought to reduce the number of those coming to the country for 
asylum and to more strictly control the large foreign community 
already present in Austria. The laws resulted both from serious 
practical problems of caring for foreigners in need of food and fears 
of many Austrians that their country was in danger of Uberfrem- 
dung, that is, being submerged by ever-increasing waves of foreign 



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Austria: A Country Study 

immigrants. Some politicians, most notably Haider, sought to profit 
politically from these fears. 

In early 1993, a referendum sponsored by Haider was held to 
determine popular support for further tightening the laws regulat- 
ing foreigners. More than 400,000 signatures were collected, half 
of what Haider had sought but still a significant response. Large 
counterdemonstrations were held to protest Haider's suggested poli- 
cies, but it was clear that Haider had tapped into widespread fears 
and resentments. Haider's extremism resulted in some FPO mem- 
bers leaving the party and forming their own party, The Liberal 
Forum (Das Liberale Forum). Led by Heide Schmidt, the FPO 
presidential candidate in 1992, the group won three seats in the 
May 1993 Landtag election in Upper Austria. Additional success- 
es for the new party were its being recognized both by the National- 
rat as a political party and by Liberal International. 

Apprehension about joining — or not joining — the European Union 
(EU — see Glossary) was another force driving Austrian politics. As 
the economy slumped and headed to an overall negative growth 
rate for 1993, Haider modified his previous endorsement of EU 
membership, sensing a chance to profit from fears about what Aus- 
tria's participation in a larger Europe might bring. The OVP and 
SPO remained strongly in favor. After much delay, Austria will 
join the European Economic Area (EEA — see Glossary) on Janu- 
ary 1 , 1994. The EEA will then consist of EU and European Free 
Trade Association (EFTA — see Glossary) countries, with the ex- 
ception of Switzerland, and will form a free-market economy of 
sixteen nations and 380 million inhabitants. 

Mass Media 

The Austrian press operates freely under the constitution of 1920, 
which guarantees all citizens freedom of expression in speech, writ- 
ing, and print. The constitution also forbids any government cen- 
sorship of the press or electronic media. Austria has a well-developed 
system of print and electronic media that provides its citizens with 
a wide variety of news sources and entertainment. 

Newspapers and Periodicals 

The Austrian newspaper market is one of the most concentrated 
in Europe. Three dailies, the Neue Kronen- Zeitung, Taglich Alles, and 
Kurier, account for more than half of the newspapers sold in the 
country. By 1993 their daily circulations were 1.1 million, 500,000, 
and 390,000, respectively, with higher circulations on Sundays. 
All three specialize in tabloid- style journalism, with a tendency 
toward sensationalism. Better educated Austrians, especially in the 



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Government and Politics 



larger cities, read either Die Presse or Der Standard, both high-quality 
newspapers published in Vienna with circulations of less than 
100,000. 

As of the early 1990s, a total of seventeen daily newspapers were 
published in Austria, and thirteen regional editions of some of these 
papers were published. Since the early 1970s, the importance of 
political party newspapers has declined precipitously. The SPO pub- 
lishes one newspaper and the OVP two, all of which have circula- 
tions of less than 100,000. The SPO's venerable newspaper, 
Arbeiterzeitung, established in 1895, was sold to private interests in 
the late 1980s when the party decided it no longer wished to cover 
the newspaper's massive losses. 

Austria also has many periodicals and magazines. Among the 
weekly periodicals, Profit, with a circulation of more than 100,000 
in 1993, has emerged as one of the best practitioners of investiga- 
tive journalism in the country. Another weekly magazine, News, 
has a circulation of more than 200,000, although it was only founded 
in October 1992. Other periodicals of note include Wochenpresse, 
a weekly; Trend, a monthly journal devoted to economic news; and 
Wiener, a monthly. 

Rising concern over financial difficulties faced by small publishers 
led the Austrian government to decide in 1975 that subsidies should 
be made available to newspapers and magazines meeting certain 
criteria. For a daily newspaper to receive government funds, it must 
have a minimum circulation of 10,000 and regional distribution. 
Weekly newspapers are required to have a minimum circulation 
of 5,000. Magazines are eligible for funds if they publish between 
four and forty issues a year. To be considered for funding, a 
newspaper or magazine must file a formal application with the 
government. Specific allocations are decided on a case-by-case basis, 
and various formulas are used to spread the funds among a large 
number of publications. No single newspaper can receive more than 
5 percent of the total budget earmarked for support of the daily 
press. 

In 1982 Austria brought its press laws up to date with the pas- 
sage of the Federal Law on the Press and Other Journalistic Me- 
dia, which clarifies the rights of individuals to sue for damages when 
they believe they have been slandered or defamed by the press. 
The law establishes maximum amounts of S50,000 for defamation 
of character and SI 00, 000 for slander. The law stipulates that 
damages are not to be awarded if it can be shown that the public 
interest was served by the publication of the material or of allega- 
tions in dispute. The law also grants individuals and corporations 
the right to respond in print to published reports they regard as 



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Austria: A Country Study 



defamatory. However, a newspaper can refuse to publish a rejoinder 
if it can prove that the report is not factual. Individuals and cor- 
porations may respond only to factual reporting; articles contain- 
ing editorial opinions and value judgments are not covered by this 
provision of the press law. 

Other provisions of the 1982 law strengthened the rights of jour- 
nalists. Journalists are guaranteed the right to refuse to collaborate 
in assignments they regard as incompatible with their ethical con- 
victions. The law also affirms the right of journalists not to divulge 
their sources in a court of law. The law further states that the 
government may not place the communications facilities of an or- 
gan of the press under surveillance unless it has reason to believe 
that a crime carrying a sentence of at least ten years may have been 
committed. 

Radio and Television 

As of late 1993, radio and television programming in Austria 
was provided exclusively by Austrian Radio and Television (Os- 
terreichischer Rundfunk — ORF). This state monopoly is expected 
to end in the mid-1990s because such monopolies are no longer 
seen by many European jurists as compatible with the free exchange 
of information and ideas. ORF was formed as a public corpora- 
tion in 1945 and reorganized in 1967 for greater political and finan- 
cial independence. In 1974 a constitutional law was passed giving 
ORF complete financial autonomy from the government and 
guaranteeing it freedom from attempts by the government or any 
state body to exert influence on programming. Additional laws 
passed in that year required ORF to present objective reporting, 
a variety of opinions, and balanced programming. 

As of 1993, ORF had two television channels and three radio 
channels. FS 1 and FS 2, the two television channels, feature a 
wide variety of programs, including news, entertainment, educa- 
tion, and music. In 1988 the nine regional ORF studios began 
broadcasting local programs. Various groups attempted to make 
the case for allowing independent television in Austria, but, as of 
1993, they had not persuaded the government to lift the monopo- 
ly enjoyed by ORF. During the 1980s, cable television became 
available, and by 1990 roughly 15 percent of Austrian homes 
received cable programming. One of the major cable programs, 
3 Sat, is a joint venture of ORF, the Swiss Broadcasting Corpora- 
tion, and one of Germany's television networks. 

ORF has four radio channels. The first channel, Osterreich 1, 
features culturally oriented programs devoted to music, literature, 
science, and news. The second channel, Osterreich Regional, carries 



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Government and Politics 



programming produced by the nine regional ORF stations, with 
an emphasis on popular entertainment and local events. Osterreich 
3 is an entertainment channel, which also carries hourly news broad- 
casts. The fourth network, Blue Danube Radio, is also an enter- 
tainment channel but differs in that it broadcasts mainly in English. 
Its news programs are in German, English, and French. 

Foreign Relations 

Since 1955 the guiding principle of Austrian foreign policy has 
been neutrality. As part of an agreement reached that year with 
the Four Powers (Britain, France, the Soviet Union, and the United 
States), Austria passed an amendment to its constitution declar- 
ing that it would forever remain neutral. Specifically, Austria 
pledged that it would never join any military alliances or allow for- 
eign troops to be stationed on its soil. The commitment to neu- 
trality was seen by virtually all political groups as a sensible step 
to achieve the complete removal of occupying forces from the 
country. 

However, Austria chose to pursue a looser model of neutrality 
than that followed by other states, such as Switzerland. Austria 
joined the United Nations (UN) in 1955, shortly after making its 
neutrality pledge. Austria did not take neutrality to mean that it 
should occupy a moral middle ground between the democratic coun- 
tries of the West and the totalitarian states of the East during the 
Cold War period. In terms of political and social ideology, Aus- 
tria was firmly within the community of democratic nations. 

A second important principle of Austrian foreign policy is in- 
ternationalism. Austria is active in many international organiza- 
tions, such as the UN and its subsidiary agencies. The country is 
a long-time participant in UN peacekeeping operations. An Aus- 
trian medical team served in the Congo (present-day Zaire) be- 
tween 1960 and 1963, and medical teams and soldiers have served 
continuously in Cyprus since 1964 and at various times in Egypt 
and Israel since 1968. Vienna is the home of two UN entities, the 
International Atomic Energy Agency and the United Nations In- 
dustrial Development Organization. During the Cold War peri- 
od, Austria consistendy supported all attempts at fostering detente 
between the United States and the Soviet Union. Austria's lead- 
ers pursued this policy because they realized that heightened ten- 
sions between the superpowers would make the maintenance of their 
country's neutrality more difficult. 

Foreign Policy During the Kreisky Era 

Bruno Kreisky, who had served as foreign minister between 1959 



213 




214 



The Vienna International Center is also known as United Nations City 
because numerous United Nations offices are located there. 

Courtesy Embassy of Austria, Washington 



215 



Austria: A Country Study 

and 1966, laid great emphasis on an active, internationalist for- 
eign policy during his tenure as chancellor (1970-83). Kreisky's 
vision of foreign policy was based on the notion that Austria, as 
a neutral country, should seek to mediate conflicts between coun- 
tries and stake out independent and innovative policies on various 
issues. He offered Vienna as a site for many series of negotiations 
on nuclear arms reductions and other international matters. 

Among Kreisky's more controversial policies was his decision 
to grant informal diplomatic recognition to the Palestine Libera- 
tion Organization (PLO) in 1980. This was an outgrowth of 
Kreisky's conviction that Israel was stubbornly refusing to recog- 
nize the legitimate interests of the Palestinian people. The fact that 
Kreisky was Jewish gave him a certain credibility in becoming so 
involved in trying to solve the Arab-Israeli conflict. Kreisky fur- 
ther surprised the world by receiving Libyan leader Muammar al 
Qadhafi in Vienna. He also showed his independent approach with 
his decision that Austria should participate in the 1980 Summer 
Olympics in Moscow, despite the boycott of the games orchestrat- 
ed by United States president Jimmy Carter in response to the 
Soviet invasion of Afghanistan in 1979. Austria also did not ad- 
here to the economic boycott of Iran organized by the United States 
after the seizure of its embassy in Tehran in 1979. 

During the 1970s, Austria collaborated extensively with other 
neutral and nonaligned countries in the UN. Austria developed 
an independent voting profile, frequently joining with other neu- 
trals such as Sweden to press for action on issues ignored by coun- 
tries belonging to military alliances. Austria also pursued this kind 
of diplomacy with the nonaligned countries belonging to the Con- 
ference on Security and Cooperation in Europe. 

New Focus on Europe 

After Kreisky's departure from the political scene in 1983, Aus- 
trian foreign policy became more focused on European matters and 
less on global issues. This shift was caused partly by the increase 
in tensions between the United States and the Soviet Union, as 
United States diplomacy under President Ronald Reagan became 
more confrontational. In this climate, Austria's room to pursue 
a foreign policy of mediation was more constricted. Concern that 
the country faced exclusion from the increasing political and eco- 
nomic integration of Europe being pursued by the European Com- 
munity (EC) was another factor that came to exert strong influence 
on Austrian diplomacy. The traditional concept of Austrian neu- 
trality had held that membership in the EC was not possible or 
desirable, even though the EC was not a military alliance. The idea 



216 



Government and Politics 



of ceding even limited areas of political and economic sovereignty 
to a supranational organization was seen as incompatible with neu- 
trality. 

As an alternative to the EC, Austria had joined with Britain, 
Denmark, Norway, Portugal, Sweden, and Switzerland to form 
the European Free Trade Association (EFTA) in 1960. EFTA was 
restricted to facilitating trade among its members and did not in- 
volve the ceding of sovereign powers. Austria also negotiated a spe- 
cial economic arrangement with the EC in 1972 that allowed for 
the duty-free exchange of industrial manufactured goods. 

By the mid-1980s, the opinion of Austria's political elites had 
changed in favor of seriously considering the advantages and dis- 
advantages of EC membership. Many argued that Austria could 
not expect to guarantee its economic future if it remained outside 
the EC. Two-thirds of Austria's trade was with members of the 
EC, with the Federal Republic of Germany (West Germany) by 
far its largest trading partner. There was also a fear that the coun- 
try could become isolated within Europe as ideological barriers be- 
tween East and West were lowered. 

A long period of debate among the major parties over EC mem- 
bership began in 1987, and the cabinet established a working group 
to examine the issue. It gradually became clear that, despite some 
misgivings over the expected impact of EC membership in certain 
areas, the two major parties, the OVP and SPO, favored apply- 
ing for entry. The trade unions had some concerns about EC mem- 
bership's diminishing their strong bargaining powers in the Austrian 
system of social partnership, but they, too, generally favored join- 
ing (see Social Partnership, ch. 3). There was also widespread con- 
cern that the high volume of highway traffic passing through Austria 
en route to West Germany and Italy was damaging the country's 
environment (see Ecological Concerns, ch. 2). Many Austrians be- 
lieved that their country's environmental laws were stricter than 
those of the EC. The priority of protecting the environment led 
the Green deputies in parliament to oppose joining the EC. 

Within the two major parties, there was little concern over the 
neutrality issue, and government leaders pointed out that although 
the EC might someday add a military dimension to its structure, 
for the foreseeable future it would remain primarily an economic 
union with aspirations of developing greater political unity. The 
new climate of glasnost in the Soviet Union ushered in by Mikhail 
Gorbachev led Austrian leaders to expect no objection from Moscow 
to an Austrian decision to seek EC membership, and this expecta- 
tion proved true. 



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Austria: A Country Study 

The government reached an internal consensus in favor of ap- 
plying for membership in June 1989, and the following month, 
Foreign Minister Alois Mock delivered the application to the EC 
Commission in Brussels. Chancellor Vranitzky emphasized to his 
countrymen that during the upcoming negotiations with Brussels 
his government would seek clear understandings on the main- 
tenance of environmental standards and the preservation of Aus- 
tria's advanced social welfare system. Vranitzky also asserted that 
the issue of limiting the volume of motor vehicle traffic passing 
through Austrian territory would be handled separately from the 
application to join the EC. Austria's application met with a chilly 
reception from some quarters in Europe, especially from a few poli- 
ticians who argued that the admission of a neutral country could 
hinder efforts at coordinating the foreign policies of the EC's mem- 
bers. However, the momentous events of late 1989 and 1990 — the 
freeing of Czechoslovakia, Hungary, and Poland from Soviet domi- 
nation and the unification of Germany — made it clear to all ob- 
servers that Austrian neutrality would take on a new dimension 
and might even be jettisoned altogether. The disintegration of the 
communist system in the Soviet Union in late 1991 further re- 
inforced the impression that neutrality was of little relevance in 
the new Europe. 

In August 1991, after an examination of the Austrian applica- 
tion, the EC issued an initial assessment that was predominantly 
favorable. By late 1993, negotiations between Austria and the Eu- 
ropean Union (EU), the organization's name as of November 1993, 
were continuing over the terms of membership. Most observers 
expected that the EU and Austria would be able to reach an agree- 
ment on Austrian entry and that the country would join the EU 
in January 1995. The main issues involved limiting international 
road traffic through Alpine regions because of environmental con- 
cerns, subsidies for Alpine farming, and foreign ownership of resi- 
dences in some parts of Austria. A less certain matter was whether 
the Austrian government could convince a majority of Austrians 
to support EU membership. The question of joining the EU will 
be voted on in a popular referendum because any governmental 
action that changes the constitution must pass this test. Many opin- 
ion polls taken in the early 1990s showed Austrians evenly divided 
over the merits of joining the EU. In order to ensure approval by 
the electorate, the Austrian government will have to gain signifi- 
cant concessions from the EU in the negotiations and mount an 
effective public relations campaign in favor of a yes vote. 



218 



Government and Politics 



Regional Issues 

Austria has generally enjoyed good relations with its neighbors, 
although there have been exceptions. The most notable exception 
has been its relationship with Italy, which was strained by the 
issue over South Tirol during the 1960s. This largely German- 
speaking region, which belonged to Austria- Hungary prior to World 
War I, was ceded to Italy in 1919 as a result of the peace negotia- 
tions. Until 1992 ethnic Germans in South Tirol, in the present- 
day region of Trentino-Alto Adige, had to struggle to maintain 
the measure of autonomy promised to them by the Italian govern- 
ment. Acts of terrorism directed against Italian targets became a 
serious problem in the 1960s, and Italy accused Austria of not do- 
ing enough to capture terrorists whom it claimed were using Aus- 
trian territory as a sanctuary. Austria and Italy eventually reached 
an agreement in 1969 on a timetable for satisfying the demands 
of the German-speaking South Tiroleans for cultural autonomy. 
Progress was slow, but in June 1992 an agreement was finally real- 
ized that granted the German speakers a greater degree of auton- 
omy. Although not allowed the right to secede from Italy, the 
cultural rights of German speakers in Trentino-Alto Adige were 
enhanced with guarantees of education in their own language, great- 
er representation in the civil service, and the right to go to the In- 
ternational Court of Justice in The Hague without permission from 
the government in Rome. Both Italian and Austrian authorities 
have declared themselves satisfied with the agreement. 

Austria became concerned as the political stability of its neigh- 
bor to the south, Yugoslavia, began to unravel in 1991. As it be- 
came clear that the republics of Slovenia and Croatia were preparing 
to break away from the Yugoslav federation, a disagreement arose 
within the OVP-SPO coalition over when to grant diplomatic recog- 
nition to the new states. In September 1991, Foreign Minister Mock 
advocated immediate recognition, but Chancellor Vranitzky 
preferred that Austria wait until other European governments were 
ready to take the same step. In the end, Vranitzky prevailed in 
this debate, and recognition was delayed until January 1992, after 
the EC recognized the newly independent states. 

On other important aspects of policy toward the breakup of 
Yugoslavia, greater unanimity existed between the OVP and SPO. 
Foreign Minister Mock was an early advocate of sending a UN 
peacekeeping force to prevent bloodshed as the various Yugoslav 
republics sought to establish their independence. In August 1991, 
Austria became the first UN member to bring to the attention 
of the Security Council the fact that large numbers of civilians in 



219 



Austria: A Country Study 

Bosnia and Hercegovina and in Croatia were being killed by Ser- 
bian forces. Despite their deep concern about the tragedy unfold- 
ing in the former Yugoslavia, both Mock and Vranitzky are in 
agreement that Austria's neutrality and its proximity to the fight- 
ing preclude the inclusion of Austrian troops in any UN peacekeep- 
ing force. 

* * * 

During the 1980s and early 1990s, the literature on Austrian pol- 
itics in English grew considerably. Austria: A Study in Modern Achieve- 
ment, edited by Jim Sweeney and Josef Weidenholzer, contains a 
useful collection of articles on Austria's political system and politi- 
cal parties. Modern Austria, edited by Kurt Steiner, covers roughly 
the same ground, in some cases in more detail, but is somewhat 
dated because it was published in 1981. Melanie A. Sully's A Con- 
temporary History of Austria is an excellent treatment of Austrian pol- 
itics during the 1980s. It is particularly good on the interaction 
between the parties and their internal problems. John Fitzmaurice's 
Austrian Politics and Society Today covers roughly the same ground 
as Sully's book and is a readable introduction to Austrian politics. 
Politics in Austria, edited by Kurt Richard Luther and Wolfgang 
C. Miiller, contains a collection of essays by Austrian political scien- 
tists examining the sociological changes in Austria during the post- 
war era and their impact on the political system. Readers with a 
knowledge of German should consult Handbuch des politischen Sys- 
tems Osterreichs, edited by Herbert Dachs et al., which contains a 
wealth of articles on political parties, political institutions, trade 
unions, foreign policy, and many areas of government policy. Also 
in German is the very useful Osterreichisches Jahrbuch fur Politik, which 
contains articles by noted specialists and politicians about recent 
political developments. (For further information and complete ci- 
tations, see Bibliography.) 



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Chapter 5. National Security 



Coat of arms of the province of Vienna 



IN 1993 THE AUSTRIAN DEFENSE ESTABLISHMENT was 
in the process of restructuring, from a force intended to defend 
Austria's territory against threats arising from hostilities between 
North Atlantic Treaty Organization and Warsaw Pact countries 
to a force that could react rapidly to local crises. Under the re- 
structuring plan, both the standing army and reserves are to be 
scaled back but are to maintain individual units in a rapid-response 
status, enabling the army to intervene quickly with appropriate 
forces to prevent instability in Austria's border areas. In view of 
the civil warfare in the former Yugoslavia and the breakup of 
Czechoslovakia into two states, the Czech Republic and Slovakia, 
as well as the possibility of overwhelming movements of refugees 
fleeing violence in nearby states, Austria considers itself to be in 
a highly exposed position in spite of the end of East- West confron- 
tation in Europe. The intervention of the Yugoslav army in Slovenia 
and Croatia in 1991 prompted the largest mobilization of the Aus- 
trian army since it was reconstituted in 1956. 

The Austrian armed forces consist of only one branch, the Bun- 
desheer (Federal Army), of which the air force (Fliegerdivision) 
is a component. There is no navy. Ground forces consist of 46,000 
men on active duty, 19,500 of whom are conscripts who serve for 
six months, followed by sixty days of refresher training with their 
mobilization units spread over a ten-year period. There are 6,000 
men in the air force, 2,400 of whom are conscripts. (There are no 
women in the Austrian armed forces.) The main active combat 
units are three mechanized brigades equipped with M-60 main 
battle tanks and Saurer armored personnel carriers. Two squadrons 
(twenty-four aircraft) of Draken fighter aircraft acquired from 
Sweden defend Austrian air space. Including activated reserve in- 
fantry brigades and regiments, total mobilized strength is about 
200,000, but the mobilization level will decline to 120,000 under 
the reorganization plan, the New Army Structure, announced in 
late 1991 and to be completed in 1995. 

Weapons of mass destruction and guided missiles were prohibited 
under the State Treaty of 1955. Also in 1955, parliament enacted 
a constitutional law prohibiting participation in any military alli- 
ance and specifying that the armed forces were to be used only for 
the defense of the country. However, neutrality, according to the 
Austrian interpretation, did not preclude contributing to peacekeep- 
ing operations under United Nations (UN) auspices. As of 1993, 



223 



Austria: A Country Study 

Austria had battalion units serving the UN in Cyprus and on the 
Golan Heights in Syria. Austria did not, however, participate in 
the UN-supported coalition against Iraq after the Iraqi invasion 
of Kuwait in 1990. 

Austria's Federal Police function in fourteen of the largest cities; 
the federal Gendarmerie functions in the remainder of the cities 
and towns and in most rural areas except for a few that maintain 
their own police forces. The Criminal Investigative Service, the 
Administrative Police, and the State Police (secret service) are also 
nationally organized under the federal Ministry for Interior. 

Austrians are generally peaceful people; domestic politics are 
rarely violent, and the level of crime is moderate. Criminal codes 
and criminal procedure codes are enlightened. Practices relating 
to criminal justice and the penal system are considered fair by Eu- 
ropean standards, although questionable conduct by the police and 
the secret service has been investigated and reforms have been in- 
stituted. 

Historical Background 

The Habsburg Military 

From the time the Habsburgs established hereditary rule over 
Austrian lands in the thirteenth century until the fall of the Habs- 
burgs at the end of World War I, their armies were among the 
largest and most significant in Europe. For 200 years, Habsburg 
forces formed a bastion defending the continent against repeated 
Ottoman campaigns to overrun Europe. In 1529 and again in 1683, 
the Turks were turned back only after reaching the gates of Vien- 
na. Count Ernst Riidiger von Starhemberg, who commanded the 
imperial troops in the city, broke the siege in 1683 with the aid 
of German and Polish forces under the Polish king, Jan Sobieski, 
then drove the Turks back into the Balkans, finally ending the Ot- 
toman threat. 

One of Austria's greatest military commanders, Prince Eugene 
of Savoy, in concerted operations with Britain's Duke of Marl- 
borough, won a series of victories over the France of Louis XIV 
in the War of the Spanish Succession (1701-14). Wars fought with 
the Prussia of Frederick the Great over Silesia in 1 740-48 (the War 
of the Austrian Succession) and 1756-63 were less successful. The 
monarchy's military potential during the eighteenth century was 
limited by the emperor's dependence on provincial diets for recruits 
and tax receipts. The nobles of the imperial lands who controlled 
the enserfed peasantry had no fixed obligation to provide soldiers 
to the Habsburgs. 



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National Security 



Austria was prominent in the coalitions that tried to check 
Napoleon Bonaparte's ambitions but was forced to accept humiliat- 
ing peace conditions after being decisively defeated in 1800, again 
in 1805 when Napoleon occupied Vienna after the Battle of Auster- 
litz, and finally after the Battle of Wagram in 1809. Yet Austria 
joined with the other great powers in the final campaign resulting 
in Napoleon's downfall in 1814. 

Habsburg armies displayed their loyalty to the monarchy in 1848 
and 1849, suppressing the revolutionary regimes that had swept 
into power in Vienna, Budapest, Milan, and Prague. In 1859 Aus- 
tria was provoked into war with Piedmont and its supporter, the 
France of Napoleon III. The Austro-Piedmontese War lasted only 
three months, but both sides mobilized large armies. The Austri- 
ans were defeated after bitter fighting at Magenta and Solferino, 
the young emperor, Franz Joseph, assuming personal command 
during the battle at Solferino. 

Prussia established its domination over other German states by 
its victory over Austria in the Seven Weeks' War in 1866. The 
critical battle was waged at Koniggratz (Hradec Kralove in the 
present-day Czech Republic). The Austrians, armed with muzzle- 
loading rifles, suffered 20,000 casualties and 20,000 prisoners. The 
battle overshadowed Austria's victories over Prussia's Italian al- 
lies at Custozza and in the naval Battie of Lissa (Vis) off the Dalma- 
tian coast in which a smaller Austrian fleet of ironclads overcame 
the Italians by bold use of ramming tactics. Following the end of 
the Seven Weeks' War, Austria experienced fifty years of peace 
until World War I broke out in 1914. 

In spite of their size and distinction in individual engagements, 
Habsburg armies of the nineteenth century had known little but 
defeat in encounters with other major powers of Europe. The armed 
forces were often handicapped by uninspired or timid battlefield 
leaders. The principal cause of their failure, however, was the fact 
that, among the five great powers, which also included Britain, 
France, Prussia, and Russia, Austria allocated the lowest propor- 
tion of its revenue to its military establishment. Various political 
groups blocked adequate expenditures on the army. For example, 
the Prussian infantry, using breech-loading rifles in 1866, had four 
to five times the effective firepower of the Austrian infantry. The 
constant economizing was also reflected in the poor training of con- 
scripts and in the quality of the notoriously underpaid company- 
grade officers. Their tactics, based on frontal assault with fixed bayo- 
nets, were outdated. The quartermaster corps had a reputation for 
inefficiency and corruption. 



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Austria: A Country Study 

The standing army of twelve corps had 240,000 men as of 1854. 
At its mobilized strength of 800,000, it was the largest in Europe, 
but the speed of mobilization and the capacity to move troops to 
the scene of battle were much inferior to those of the Prussians, 
who made full use of their growing rail system. As a matter of policy, 
conscripts were assigned to regiments far from their homes. A call- 
up involved slow train journeys for reservists; mobilization required 
eight weeks, nearly twice as long as mobilization of the Prussian 
army, which was organized by region. 

The creation of Austria-Hungary (also seen as the Austro- 
Hungarian Empire) under the Compromise (Ausgleich) of 1867 
separated the Hapsburg Empire into independent Austrian and 
Hungarian governments. Only the army, foreign affairs, and related 
budgetary matters remained joined under the emperor, who held 
supreme command of all forces in time of war. A new army law 
decreed universal three-year conscription followed by a ten-year 
reserve obligation. In practice, only about one in five of those lia- 
ble to service were called up, and many were sent on leave after 
two years. The army of Austria-Hungary has been described as 
a state within a state. In an empire of ten nationalities and five 
religions, marked by ethnic conflict and sharp political and eco- 
nomic divisions, the army formed the only real bond among the 
emperor's subjects and the sole instrument through which loyalty 
to him could find expression. 

Nevertheless, Austria-Hungary gave the impression of being a 
highly militarized nation. British historian Edward Crankshaw not- 
ed that not only the emperor but most males in high society never 
wore civilian clothes except when hunting. Select regiments of the 
army were splendidly outfitted, but, with a few dedicated exceptions, 
the officers, so magnificent on the parade ground, "shrank . . . from 
the arbitrament of arms as from an unholy abyss." 

Regiments were organized along linguistic lines, although Ger- 
man was the language of command. Ethnic factors did not pre- 
vent recruitment of non-German speakers to the officer corps or 
their regular promotion. Hungarians, Croats, Serbs, Poles, Italians, 
Czechs, Slovenes, and Romanians could be found in senior posi- 
tions. In the more prestigious units, most field- grade officers owed 
their ranks to birth or wealth. As of 1900, a majority of the officer 
corps in the Austro-Hungarian army were native German speak- 
ers, although only one-fourth of the empire's total population was 
German speaking. 

Two World Wars, 1914-18 and 1939-45 

Although Austria-Hungary's aim in 1914 was to fight a limited 



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National Security 



war to punish Serbia after the assassination of the heir to the Habs- 
burg crown, Franz Ferdinand, the crisis quickly flared out of con- 
trol as European powers mobilized their mass armies in accordance 
with their treaty commitments. Although poorly prepared for con- 
flict and lacking essential weapons and unit cohesiveness, the 
Austro-Hungarians were immediately faced with a two-front war 
against Serbia and Russia. Their fifty-nine divisions (which included 
hastily raised reserve units) had to secure a front running from the 
Adriatic Sea to central Poland. The superior Russian army drove 
the Austro-Hungarians back with immense losses in Polish Galicia. 
The Russian front was stabilized only after German officers as- 
sumed command. Although Austria- Hungary had expected to con- 
quer Serbia quickly, Serbia was not defeated until late 1915 after 
terrible fighting in Bosnia. The campaigns against Italy, which had 
entered on the side of the Allies in May 1915, were somewhat more 
successful, the Habsburg armies fighting with stubbornness and 
at times with great skill. In spite of rebellious secession movements 
among some non-Germans, the bulk of the army remained loyal, 
holding together until the last months of the war. Only among Czech 
soldiers affected by Slavic nationalism were there serious defections 
to the Russians. At the last, however, front-line troops in Italy aban- 
doned their guns, and the revolt spread as even German-speaking 
troops refused to obey orders. Austro-Hungarian military casual- 
ties of 1 .4 million killed or died in captivity and 3.6 million wounded 
were greater than those of Germany on a proportional basis. 

Truncated Austria, reduced to some 6.5 million primarily Ger- 
man speakers after the war, was to some degree divided even against 
itself between a conservative population in the rural western areas 
of the nation and the urban socialists of Vienna and other indus- 
trial centers of the east. A regular Austrian army of 30,000 men 
was established in 1922, and, although free from political involve- 
ment, it had conservative leanings in the imperial tradition. Both 
police and army were weak; they could not prevent the formation 
of paramilitary groups by rival political blocs. The Social Democrat- 
ic Workers' Party (Sozialdemokratische Arbeiterpartei — SDAP) 
formed the Republican Defense League (Republikanischer Schutz- 
bund), and the right-wing Christian Social Party (Christlichsozi- 
ale Partei — CSP) had links with the various rightist militias that 
sprang up after the war. Both groups had impressive arsenals. In 
1934, reacting to pressures by the CSP chancellor, Engelbert Doll- 
fuss, and to provocations by rightist militias, the SDAP called a 
general strike and the Republikanischer Schutzbund rose in a num- 
ber of cities. The uprising was put down in four days after the army 



227 



Austria: A Country Study 

used artillery against workers' apartment blocks in Vienna where 
the socialist revolt was centered. Although the army's actions were 
approved by Dollfuss, the episode seemed to attest to the army's 
alignment with rightist elements and its antagonism to the interests 
of the urban industrial workers. 

Germany's annexation (Anschluss) of Austria in 1938 was accom- 
plished without resistance under orders of the government. The 
armed forces suffered from low morale and were infused with pro- 
Nazi sentiment. Austrian troops in Salzburg and Innsbruck report- 
edly put themselves immediately under German command and 
participated in joint victory parades. The troops were dispersed 
throughout the army, the German Wehrmacht; no purely Austrian 
units were retained. Most of the generals and many field-grade 
officers were purged or were shifted to administrative posts. The 
thirty-five divisions raised on Austrian territory following the out- 
break of World War II were composed mainly of Austrians. For 
the most part, they were assigned to the Russian front. 

Austria suffered tremendous losses in the war, yet its 247,000 
military deaths were fewer proportionately than German losses. 
A further 750,000 were made prisoners of war, the last of these 
returning from the Soviet Union as late as 1955. 

During the postwar occupation (1945-55) by the Four Powers 
(Britain, France, the Soviet Union, and the United States), the 
three Western occupying powers permitted the Austrian govern- 
ment to equip a mobile regiment of the Gendarmerie, organized 
into "shock battalions." Their primary mission was to control 
communist- inspired disturbances. Headquartered in Linz, the First 
Battalion was responsible for the provinces of Salzburg and Up- 
per Austria south of the Danube (the American Zone), the Second 
Battalion for Styria (the British Zone), and the Third Battalion for 
Tirol and Vorarlberg (the French Zone). (The Russian Zone con- 
sisted of Lower Austria, Burgenland, and Upper Austria north of 
the Danube. Vienna was occupied by the Four Powers.) Surplus 
equipment and vehicles were transferred to the Austrian battal- 
ions by the Western powers. In 1956 when the Austrian army, the 
Bundesheer (Federal Army) was reconstituted, 6,500 officers and 
enlisted men of these special units formed its nucleus. 

Strategic Concepts and Missions of the Austrian Armed 
Forces 

The withdrawal of the Allied forces as a result of the State Treaty 
of 1955 dramatically affected the general strategic situation in Cen- 
tral Europe. The presence of two neutral countries — Switzerland 
and Austria — in effect split the defenses of the North Atiantic Treaty 



228 



A noncommissioned officer 
armed with a 5.56mm 



Trainees in a tactical field exercise 
Courtesy United States 
Department of Defense 



Steyr assault rifle 
Courtesy United States 
Department of Defense 



Organization (NATO) into northern and southern tiers. Links be- 
tween NATO forces in southern Germany and northern Italy had 
to be routed through France. Moreover, if Warsaw Pact forces had 
chosen to violate Austrian neutrality by driving westward through 
the Danube Basin, they would have been able to outflank strong 
NATO defenses on the central front and avoid a contested Danube 
River crossing in Bavaria. A second line of potential Warsaw Pact 
attack ran across the southern flanks of the main Alpine range from 
the Hungarian Plain leading into northern Italy. 

The early years of the Bundesheer were directed by military lead- 
ers whose experience reflected their service as mid-level officers in 
the German army, the Wehrmacht. The army's structure resem- 
bled that of European NATO powers but on a smaller scale. Its 
combat units were filled with permanent cadre and nine-month 
conscripts. It lacked sufficient manpower and air cover. 

In 1956 the Bundesheer was called on to handle the first of two 
border crises. It was in that year that the Hungarian uprising was 



229 



Austria: A Country Study 

crushed by the Soviet Union and 170,000 Hungarians fled into 
Austria. The second was in 1968 when Warsaw Pact troops in- 
vaded Czechoslovakia. Austria's experiences during the Hungar- 
ian and Czechoslovak crises helped clarify the nature of the potential 
threat to the nation's neutrality and led to a reorientation of defense 
policy and a revised definition of the military's mission. 

After 1970, under the influence of a majority of the Socialist Party 
of Austria (Sozialistische Partei Osterreichs — SPO) in parliament, 
military service was deemphasized and conscription reduced to six 
months. However, with the system of refresher training for former 
conscripts, the basis for a large militia program was established, 
and there was more total manpower available. The example of Swit- 
zerland's reliance on mobilization units to uphold its neutrality 
provided a useful lesson. However, strict budgetary limits continued 
to delay the acquisition of modern supersonic combat aircraft un- 
til the late 1980s. 

Until the early 1990s, Austria's security policy centered on a 
strategy of Abhaltestrategie (deterrence or dissuasion). Its aim was 
to convince a prospective invader that any possible advantages de- 
rived from an attack on or across Austria would easily be offset 
by a loss in time, personnel, and equipment. The Austrian ver- 
sion of deterrence flowed from the philosophy of Comprehensive 
National Defense, also embraced by such other European neutrals 
as Switzerland, Sweden, and Finland. This concept encompasses 
the psychological, civil, economic, and military defense of the home- 
land. Military defense is based on an area defense combat doctrine 
that uses Austria's geography — its mountains and forests — to the 
utmost. Austrian forces would use hit-and-run tactics to slow and 
wear down the aggressor, while avoiding pitched battles. Defense 
of preselected key zones and strong points along or near primary 
areas of approach would be used to channel the enemy's advance 
to make it more susceptible to both commando and limited armor 
counterattacks. 

Austrian military planners concluded that the least likely threat 
scenario was one in which Austria would be involved in an all-out 
nuclear war, a role that in any event was beyond the capability of 
such a small country. Rather, the problem was how Austria could 
best use its limited military capacity to deal with the range of threats 
with which the country might realistically be faced. Three levels of 
threat were identified. The first was a localized political crisis near 
Austria's borders, such as the case of Czechoslovakia in 1968 or 
the Slovenian assertion of independence from Yugoslavia in 1991. 
These situations could be faced by rapidly shifting armored and 
mechanized standing forces to the border area where trouble could 



230 



National Security 



break out. Austrian military leaders stressed that their purpose 
would be to avoid hostilities and to give credence to their determi- 
nation to prevent, as one former army commander expressed, 
"wanton or negligent disregard of Austria's neutrality." 

A second level of threat might arise in the case of hostilities be- 
tween neighboring states. In such an event, Austria might have 
to deny right of passage, prevent Austrian territory from being used 
as a base or refuge, or defend the integrity of its air space. In this 
situation, reserves would have to be partially or fully deployed. 
In the other situation contemplated, defense against clear aggres- 
sion threatening the state, the nation's entire military potential 
would be deployed. 

In the third level of threat, it was assumed that the aggressor 
would consider Austrian territory useful only as a base of opera- 
tions against a primary enemy. Thus, the purpose of an Austrian 
military buildup would be to compel a potential aggressor to con- 
clude that the advantages of mounting an attack against Austria 
were out of proportion to the price that would have to be paid and 
the delay encountered. 

To deal with these contingencies, Austria developed the area 
defense (Raumverteidigung) concept in the mid-1970s. Under this 
plan, all of Austrian territory was denoted as either a key zone 
(Schlusselzone) or an area security zone. The key zones were those 
having prime value as military routes of advance, such as the 
Danube and Inn river valleys and the mountain passes of southern 
Austria. Austria's combat strength was to be concentrated in the 
key zones, where enemy forces could be funneled and then de- 
stroyed by armored and mechanized units. Main lines of communi- 
cation were to be defended by static defenses consisting of fortified 
gun positions and prepared demolitions positioned around or near 
natural obstacles. Rear-echelon units of the enemy were to be simul- 
taneously harried by reserve light infantry forces. In the area secu- 
rity zones (Raumsicherungszonen), the objective would be to deny 
unchallenged use of the terrain by the use of prepared artillery po- 
sitions, antitank obstacles, and guerrilla-type actions (Jagdkampfe) 
on the enemy's flanks and rear, forcing the invader to deploy com- 
bat troops to protect service and support operations. 

The breakup of the Warsaw Pact and the subsiding of East-West 
tensions in 1990 and 1991 necessitated a fundamental reappraisal 
of Austrian security policy. Austrian planners no longer expected 
a large-scale invasion requiring defense of the entire territory. 
Therefore, changes in the security policy were undertaken in 1993 
with the New Army Structure (Heeresgliederung Neu). This policy, 
to be completed in 1995, is intended to meet local crises arising 



231 



Austria: A Country Study 

from internal instability in countries on Austria's borders that would 
precipitate large refugee flows and spillover violence. Contemplated 
structural changes emphasize the immediate availability of reac- 
tion forces that could deal with particular situations without the 
need for mobilization. 

Commenting in 1992, Defense Minister Werner Fasslabend said 
that although the collapse of the Soviet empire had put an end to 
East- West confrontation, the dramatic changes had contributed to 
new risks in the form of local and ethnic conflicts. Although the 
danger of world conflagration had diminished, Austria was in one 
of the regions where instability had actually increased. 

Austria's miliary leadership saw a continuing mission to defend 
the country's border to prevent the Yugoslav civil war from spill- 
ing into Austrian territory. The breakup of Czechoslovakia into 
two states in 1993 also raised threats of instability on the nation's 
northern flank. Control over refugees attempting to flee fighting 
or economic hardship could also necessitate intervention of the 
armed forces. 

Neutrality and the Armed Forces 

Under the State Treaty of 1955, a number of restrictions were 
imposed that affected the buildup of the Bundesheer. Under Arti- 
cle 13 of the treaty, Austria was prohibited from possessing "any 
self-propelled or guided missiles or guns with a range of more than 
thirty kilometers." On October 26, 1955, the government passed 
a law in which Austria declared of its own free will its permanent 
neutrality. The law further specified that "Austria will never in 
the future accede to any military alliances nor permit the estab- 
lishment of military bases by foreign states on her territory." The 
Austrian government asserted that it alone was competent to de- 
fine Austrian neutrality. 

Austria has interpreted its posture as a neutral state in Europe 
in somewhat the same terms as Switzerland. It has deliberately 
adopted a more active policy of involvement in international peace- 
keeping and humanitarian matters, in particular those it could per- 
form in conjunction with other members of the UN or at the behest 
of the UN. In 1960 the army sent a medical team to the Congo 
(present-day Zaire) and has provided other medical units, military 
police, and observers to Cyprus and other areas in the Middle East 
since 1964. By the early 1990s, some 30,000 Austrians had served 
in UN missions. As of 1993, one battalion of 350 troops was de- 
ployed with the United Nations Peacekeeping Force in Cyprus 
(UNFICYP) patrolling the buffer zone between the Greek Cyp- 
riot and Turkish forces. Another battalion of 450 troops was 



232 



National Security 



on the Golan Heights in Syria as part of the United Nations Dis- 
engagement Observer Force (UNDOF). Seven observers were with 
the United Nations Iraq-Kuwait Observer Mission (UNIKOM), 
and seventeen observers were attached to the United Nations Truce 
Supervision Organization (UNTSO) in Cambodia. 

Austria did not participate directly in the UN-backed action in 
1991 to drive the Iraqi invasion forces out of Kuwait. It did, 
however, provide financial assistance to states suffering from dis- 
location caused by the invasion. In addition, the United States was 
granted expanded overflight authority for troops and supplies in 
connection with Operation Desert Shield and Operation Desert 
Storm. This action, a departure from Austria's former posture of 
strict neutrality, was interpreted as a gesture to help demonstrate 
that Austria's neutral status need not be a barrier to future mem- 
bership in the European Union (EU — see Glossary). In the same 
vein, Austria announced that it would grant NATO permission 
to use its airspace for airborne warning and control system 
(AW ACS) aircraft as "an expression of solidarity within the frame- 
work of pan-European security." 

With the exception of the prohibition on guided missile systems, 
restrictions in the State Treaty on the acquisition of particular 
weapons have not prevented Austria's defense buildup. Austria 
refrained for many years from the purchase of modern antiaircraft 
and antitank guided missiles in spite of the fact that such weapons 
have been accepted as essential elements of defense in all modern 
armies. Short-range weapons of this type had not been developed 
when the treaty was concluded. Nevertheless, in 1988 when Aus- 
tria sought a reinterpretation of Article 1 3 by the other signatories 
to justify purchasing such weapons, its attempt was not successful. 

In 1989, however, Austrian authorities reached a decision to ac- 
quire surface-to-air missiles (SAMs) and antitank missiles on the 
understanding that they were intended solely for defensive pur- 
poses. The changed security situation in Europe made it possible 
for Austria to take such a step without fear of provoking countries 
that belonged to the Warsaw Pact. As of 1993, Austria was ac- 
cepting delivery of BILL (Bofors, Infantry, Light and Lethal) 
antitank missiles from Sweden and was also planning to purchase 
larger antitank missiles from France or the United States. Its Draken 
interceptor aircraft will be armed with Sidewinder air-to-air mis- 
siles, and its ground-based antiaircraft missile defense will be 
equipped with French Mistral missiles. 

National Defense 

Under the constitution, the president is the nominal commander 



233 



Austria: A Country Study 

in chief of the armed forces. In reality, the chancellor has opera- 
tional authority, exercised through the minister for national defense. 
The chancellor also chairs the National Defense Council, which 
has as its members a vice chairman, the minister for national 
defense, an appointee of this minister, the general troop inspector 
of the armed forces, and a parliamentary representative. The 
minister for national defense, acting in cooperation with the minister 
for interior, coordinates the work of the four major committees 
under the National Defense Council: the Military Defense Com- 
mittee; the Civil Defense Committee; the Economic Defense Com- 
mittee; and the Psychological Defense Committee. The general 
troop inspector acts as the senior military adviser to the minister 
for national defense, assists the minister in the exercise of his 
authority, and, as head of the general staff, is responsible for plan- 
ning. However, the army commander exercises direct operational 
control of the Bundesheer in both peacetime and wartime. 

Article 79 of the constitution, as amended in 1985, states that 
the army is entrusted with the military defense of the country. In- 
sofar as the legally constituted civil authority requests its coopera- 
tion, the army is further charged with protecting constitutional 
institutions and their capacity to act, as well as the democratic free- 
doms of the inhabitants; maintaining order and security in the in- 
terior; and rendering aid in disasters and mishaps of extraordinary 
scope. In administering the armed forces, the Ministry for National 
Defense is organized into four principal sections and the inspec- 
torate general: Section I deals with legal and legislative matters; 
Section II handles personnel and recruitment matters, including 
discipline and grievances; Section III is concerned with troop com- 
mand, schools, and other facilities, and it also comprises depart- 
ments G-l through G-5 as well as a separate department for air 
operations; and Section IV deals with procurement and supply, 
quartermaster matters, armaments, and ordnance (see fig. 12). 

The general troop inspectorate is a separate section of the ministry 
with responsibility for coordination and fulfillment of the missions 
of the armed forces. It encompasses a general staff department, 
an attache department, and planning and inspection groups. 

The armed forces consist solely of the army, of which the air 
force is considered a constituent part. As of 1993, the total active 
complement of the armed forces was 52,000, of whom 20,000 to 
30,000 were conscripts undergoing training of six to eight months. 
The army had 46,000 personnel on active duty (including an esti- 
mated 19,500 conscripts), and the air force had 6,000 personnel 
(2,400 conscripts). 



234 



National Security 



Army 

Under the area defense strategy, which had determined the ar- 
my's organizational structure until 1993, the army was divided into 
three principal elements: the standing alert force (Bereitschafts- 
truppe) of active units, including the air division; the mobile militia 
(Mobile Landwehr), organized as eight mechanized reserve brigades 
to be deployed to key danger spots in the event of mobilization; 
and the stationary militia (Raumgebundene Landwehr) of twenty- 
six reserve infantry regiments organized for territorial defense. Both 
the mobile militia and the stationary militia were brought up to 
strength only in times of mobilization or during periods allotted 
for refresher training, usually three weeks in June. Training of con- 
scripts was conducted by twenty-eight training and equipment- 
holding regiments (Landwehrstammregimenten). On mobilization, these 
regiments would disband, with their cadre reassigned to lead reserve 
units or form replacement regiments and battalions. 

At the army level were a headquarters, guard, and special forces 
battalions and an artillery battalion at cadre strength. Two corps 
headquarters, one in the east at Graz and one in the west at Salz- 
burg, would, on mobilization, command the provincially organized 
units in their respective zones. Each corps included artillery, anti- 
tank, antiaircraft, and engineering battalions and a logistics regi- 
ment, all on a cadre basis. 

Each of the nine provincial military commands supervised the 
training and maintenance activities of its training and equipment- 
holding regiments. On mobilization, these nine commands would 
convert to a divisional headquarters commanding mobile militia, 
stationary militia, and other independent units. 

The only active units immediately available in an emergency 
were those of the standing alert force of some 15,000 career sol- 
diers supplemented by conscripts. The force was organized as a 
mechanized division consisting of three armored infantry brigades. 
Each brigade was composed of one tank battalion, one mechanized 
infantry battalion, and one self-propelled artillery battalion. Two 
of the brigades had antitank battalions equipped with self-propelled 
weapons. The divisional headquarters was at Baden near Vienna; 
the three brigades were based in separate locations, also in the north- 
east of the country. 

The New Army Structure — the reorganization plan announced 
in late 1991 and scheduled to be in place sometime in 1995 — replaces 
the previous two-corps structure with one of three corps. The 
new corps is headquartered at Baden, with responsibility for the 
two northeastern provinces of Lower Austria and Upper Austria 



235 



Austria: A Country Study 



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236 



National Security 



(see fig. 13). Army headquarters will be eliminated, as will the divi- 
sional structure for the three standing brigades. The three corps — in 
effect, regional commands — will be directly subordinate to the 
general troop inspector. The three mechanized brigades will be 
placed directly under the new Third Corps at Baden, although in 
the future one brigade may be assigned to each of the three corps. 
The mobile militia will be reduced from eight to six mechanized 
brigades. Each of the nine provincial commands will have at least 
one militia regiment of two to six battalions as well as local defense 
companies. 

Total personnel strength — both standing forces and reserves — 
is to be materially contracted under the new plan. The fully mobi- 
lized army will decline in strength from 200,000 to 120,000. The 
standing alert force will be reduced from 15,000 to 10,000. Reac- 
tion time is to be radically shortened so that part of the standing 
alert force can be deployed within hours to a crisis zone (for exam- 
ple, one adjacent to the border with Slovenia). A task force ready 
for immediate deployment will be maintained by one of the 
mechanized brigades on a rotational basis. Separate militia train- 
ing companies to which all conscripts are assigned will be disman- 
tled; in the future, conscripts will undergo basic training within 
their mobilization companies. Conscripts in the final stages of their 
training could supplement the standing forces by being poised for 
operational deployment at short notice. 

Personnel, Conscription, Training, and Reserves 

Until 1971 Austrian males were obligated to serve nine months 
in the armed forces, followed by four days of active service every 
two years for training and inspection. In 1971 the period of initial 
service was reduced to six months, followed by a total of sixty days 
of refresher training in the reserves. In the early 1990s, about 45,000 
conscripts completed their initial military training every year, and 
80,000 reservists participated in some form of exercises each year. 

Reducing the mobilization strength of the army to 120,000 un- 
der the New Army Structure plan is to be accomplished in part 
by limiting initial training of recruits to six months, followed by 
reducing the period allotted for refresher training from twenty years 
to ten years. Each reservist is to receive training over a twelve-day 
period every second year during his first ten years of reserve duty, 
generally not extending beyond the time he reaches his mid-thirties. 
The reduced need for conscripts corresponds to a lower pool of 
young men because of a declining birth rate. The existing availa- 
bility of about 40,000 fit trainees annually as of 1993 is expected 
to fall to barely 30,000 by the year 2000 and to 26,000 by 2015. 



237 



Austria: A Country Study 




National Security 



Conscripts can choose to serve seven months instead of six, and 
they have a shorter reserve obligation. Some may serve their full 
obligation of eight months at one time and have no reserve obliga- 
tions, but this may occur only at the army's discretion. Under a 
1974 law, conscientious objectors can be assigned work as farm 
laborers, medical orderlies, or other occupations in lieu of mili- 
tary service. Exemptions from service are liberally granted — in 1992 
about 12,000 persons were exempted, a great increase over the 1991 
total of 4,500. The increase occurred after a new law, valid only 
for 1992 and 1993, no longer required young men to present their 
objections to the military in a credible way. Previously, that had 
not been the case. In 1990, for example, two young men rejected 
by the alternate service commission on the grounds that they did 
not present their beliefs in a credible manner were sentenced to 
prison terms of three months and one month, respectively. 

Conscripts usually attain the rank of private first class by the 
completion of initial training. Those with leadership potential may 
serve a longer period to obtain noncommissioned officer (NCO) 
status in the militia. Those volunteering for the career service can, 
after three to four years, apply to attend the NCO academy and 
later a senior NCO course to qualify as warrant officers. Both regu- 
lar and militia officer candidates undergo a one-year program of 
basic training. After a further three years, regular officer candi- 
dates attending the military academy at Wiener Neustadt and militia 
officer candidates undergoing periodic intensified refresher train- 
ing qualify as second lieutenants. The reserve obligation of con- 
scripts generally ends by the time they reach their mid-thirties; 
NCOs and officers usually end their reserve status at a later age 
depending on their rank and specialization. By the early 1990s, 
some 1 .3 million men had completed their initial service and refresh- 
er training obligations and had no further active-duty commitment. 

The military personnel system is an integral part of a compre- 
hensive civil service system. The nine officer ranks from officer 
candidate through general correspond to grades I through IX of 
the civil service system. The highest grade, IX, may be occupied 
by a section chief (undersecretary), a career ambassador, or a three- 
star general. A grade VIII position may be held by a departmen- 
tal counselor, a career minister, or a brigadier general. Salary 
levels are the same for both civil and military personnel in the 
equivalent grades, although various allowances may be added, such 
as flight pay or hazardous-duty pay. 

Promotion is not based solely on merit but on position attained, 
level of education, and seniority. Officers with advanced degrees 
(for which study at the National Defense Academy qualifies) can 



239 



Austria: A Country Study 



expect to attain grade VIII before reaching the retirement age of 
sixty to sixty-five. Those with a baccalaureate degree can expect 
to reach grade VII (colonel), and those without university train- 
ing will retire as captains or majors. Career NCOs form part of 
the same comprehensive personnel structure. It is common for 
NCOs to transfer at some stage in their careers to civilian status 
at the equivalent grade, either in the Ministry for National Defense 
or in the police or prison services after further training. 

The system of promotion in the Austrian military, which offers 
no incentive for early retirement, means that the military is top- 
heavy with senior officers. The New Army Structure, which is in- 
tended to result in many fewer active-duty and reserve commands, 
compounds the difficulty. Personnel changes can be implemented 
only gradually, as the surplus of officers shrinks by attrition. As 
of 1991, the army had four officers of general rank, fifty-nine at 
the rank of brigadier general (one star), 155 colonels, and 254 lieu- 
tenant colonels. The education of career officers is conducted at 
the Maria Theresa Military Academy at Wiener Neustadt, thirty 
kilometers south of Vienna, which was founded in 1752. Young 
men who have completed their university entrance requirements 
are eligible to compete for places. The three-year course graduated 
212 students in 1990. At the National Defense Academy in Vienna, 
which has a curriculum comparable to those of the National Defense 
University and the Army War College in the United States, opera- 
tional and troop commanders of field- grade rank study for three 
years in preparation for general staff and command positions. The 
NCO school is located at Enns near Linz. Troop schools provide 
continuous specialized courses for officers and NCOs in artillery, air 
defense, armor, combat engineering, communications, and the like. 

Women have never been accepted for service in the Austrian 
armed forces. In a public opinion survey in 1988, about 66 per- 
cent of those polled approved of opening the military to voluntary 
service by women; only 9 percent favored obligatory service. 
Although consideration had been given to opening certain specialties 
to female volunteers, the question is apparently in abeyance in an 
army already facing retrenchment. 

According to data published by the United States Arms Con- 
trol and Disarmament Agency, Austria had 5.6 persons in uni- 
form in 1991 per 1,000 population. Two other neutral countries 
of Europe, Sweden and Switzerland, with populations compara- 
ble to that of Austria, had 7.3 and 3.2 persons in the standing mili- 
tary, respectively, per 1,000 population. However, the mobilization 
strengths of both countries were far higher than that of Austria: 
700,000 for Sweden, and 625,000 for Switzerland. 



240 



National Security 

Army Equipment 

The principal armored weapons in 1993 were 169 M-60 main 
battle tanks of United States manufacture in service with the tank 
battalions of the three readiness brigades. Beginning in 1986, the 
M-60s were upgraded to A3 standard by the installation of new 
engines, fire-control systems with laser- range finders, and a stabili- 
zation system. The modernization was carried out by the Austri- 
an firm of Steyr-Daimler-Puch, often referred to as Steyr. A light 
tank, the Kiirassier SK-105, was developed by Steyr in the late 
1960s. It carries a French-made 105mm gun that has been modi- 
fied to fire more powerful fin-stabilized ammunition. The SK-105 
serves in effect as an armored tank destroyer. The army's armored 
personnel carrier (APC) is the Saurer 4K-4E/F, an early version 
of a Steyr design that has been exported to a number of countries. 
Considered obsolete, the Saurer is expected to be replaced by a 
newly developed Steyr APC in the late 1990s. 

The most modern artillery weapons are fifty-four 155mm self- 
propelled howitzers purchased from the United States in 1988. The 
army is planning to upgrade all fifty-four to A5 standards, and it 
has placed an order to purchase twenty-four additional howitzers. 
The remaining guns in the artillery inventory are forty-year-old 
towed 105mm and 155mm howitzers, considered to be obsolete 
in terms of range and accuracy. A 130mm truck-mounted rocket 
launcher of Czechoslovak manufacture, in the inventory since the 
1960s, is of limited range and rate of fire. 

Austria relies heavily on fixed artillery installations for defense 
of key points. In addition to twenty-four SFK 155mm guns in "for- 
tress" configuration, Austria purchased 200 obsolete Centurion 
tanks from the Netherlands and converted their turrets into fixed- 
gun emplacements. 

The army's most serious shortcomings are in air defense and 
antitank weaponry. Without improved protection against enemy 
tactical aircraft and attack helicopters, Austrian armored units are 
highly vulnerable. The primary air defense weapon is the 40mm 
self-propelled antiaircraft gun. A radar-directed 35mm system, with 
limited mobility and range, is used principally for static defense. 
Optically sighted 20mm guns, some mounted on all-terrain vehi- 
cles, are the only form of air defense for infantry forces but give 
little protection against modern combat aircraft. Austria is evalu- 
ating various low-level air defense missile systems with the inten- 
tion of purchasing one battery of twelve launchers for each brigade 
beginning about 1994. 



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Austria: A Country Study 



The announcement in 1989 that Austria considered the State 
Treaty limitation on short-range defensive missiles outdated and 
void has cleared the way for the army to acquire its first antitank 
missile system to replace obsolete guns, recoilless rifles, and rock- 
et launchers. After trials of several weapons, Austria purchased 
the Bofors RBS-56 BILL, a man-portable system, from Sweden. 
The army is reportedly also considering purchase of either the Unit- 
ed States TOW (tube-launched, optically tracked, wire-guided) or 
the French HOT (high- subsonic, optically guided, tube-launched) 
system as longer-range antitank missiles to be mounted on a wheeled 
armored vehicle. As many as 200 systems are expected to be pur- 
chased initially, enough for twelve launchers for each mechanized 
or infantry brigade. 

Air Force 

Austria's air force (Fliegerdivision) is headquartered at Tulln- 
Langenlebarn Air Base twenty-five kilometers northwest of Vienna. 
The air force has as its missions the defense of Austrian air space, 
tactical support of Austrian ground forces, reconnaissance and mili- 
tary transport, and search-and-rescue support when requested by 
civil authorities. 

Until 1985, when the first of twenty-four Saab J-350e Drakens 
were delivered, the country had remained essentially without the 
capacity to contest violations of its airspace. The Drakens, recon- 
ditioned after having served the Swedish air force since the early 
1960s, are armed only with a cannon, in accordance with the re- 
strictions on missiles in the State Treaty of 1955. However, fol- 
lowing Austria's revised interpretation of its obligations under the 
treaty, a decision was made in 1993 to procure Sidewinder air-to- 
air missiles. The first of these missiles will be purchased used from 
the Swedish air force. A higher performance model of the Side- 
winder will be purchased directly from the United States; deliver- 
ies may begin in 1995. French Mistral surface-to-air missiles 
(SAMs) were purchased to add ground-based protection against 
air attack. The first of the French missiles arrived in Austria in 
1993; deliveries are to be concluded in 1996. 

Phaseout of the Drakens is scheduled to begin about 1995, and 
studies are under way to select a replacement, probably one that 
can be configured for both air defense and ground support mis- 
sions. Possible replacements for the Draken are the United States 
F-16 and F-18. In addition to the two squadrons of Drakens, the 
air force has thirty-one Saab 105Oe fighters available for reconnais- 
sance and close air support of ground troops; however, eight Saabs, 
borrowed from the combat squadrons, are regularly employed as 



242 



Over rugged, snowy terrain, horses still provide mobility. 
An officer briefs two noncommissioned officers on the next phase of a 

tactical field problem. 
Courtesy United States Department of Defense 



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Austria: A Country Study 

jet conversion trainers. Acquired in 1970-72 after service in the 
Swedish air force, the subsonic Saabs are of limited value in a com- 
bat role. The helicopter fleet includes Agusta-Bell (AB) 204s (mainly 
medical evacuation), AB-206s (training and liaison), and AB-212s 
(used by air-mobile troops and for light transport). French Alouettes 
are available for search-and-rescue tasks, including high mountain 
operations. The Bell OH-58 Kiowa, a scout helicopter, is mount- 
ed with a rapid-firing machine gun, but the air force lacks a true 
attack helicopter. Most of the helicopters, except the AB-212s, are 
becoming obsolete (see table 16, Appendix). 

The air transport fleet is seriously deficient, a fact underscored 
by its inability to support the armed forces in their UN peacekeeping 
and humanitarian activities. The air force has at its disposal two 
Short Skyvans and twelve Pilatus PC -6s that can handle only light 
cargoes. Among air force priorities — unfulfilled because of bud- 
getary constraints — is the procurement of three to six medium- 
transport aircraft. 

The air force is organized into a division of three flying regi- 
ments and one radar (air defense) regiment. Air Regiment I at 
Tulln-Langenlebarn consists of the light transport squadron plus 
one helicopter wing of AB-206s and OH-58s. Air Regiment II at 
Graz-Thalerhof, Aigen in Ennstal, and Zeltweg consists of the air 
interceptor wing of Drakens and a wing of two Alouette helicopter 
squadrons. Air Regiment III at Linz-Horsching consists of the 
fighter-bomber wing of Saab 105Oes and a helicopter wing of 
AB-204s and AB-212s. An air defense battalion equipped with 
20mm and 35mm antiaircraft guns and a variety of radar systems 
is attached to each air regiment. 

The Central Flying School at Zeltweg is equipped with Saab 9 ID 
Safirs and Saab 105Oes, while transport pilots train on PC-7s. Aus- 
trian pilots are sent to northern Sweden for training in operation 
of the Drakens. 

Uniforms, Ranks, and Insignia 

The service and dress uniform of the Austrian army is gray; for 
formal occasions, a white uniform may be worn. The air force uni- 
form is identical, with the addition of wings worn on the right jacket 
breast — gold for officers and silver for enlisted personnel. Branches 
of service are identified by beret colors: scarlet for artillery; green 
for infantry; black for armor; cherry for air force; and dark blue 
for quartermaster. Insignia of rank are worn on the jacket lapel 
of the dress uniform (silver stars on a green or gold shield) and 
on the epaulets of the field uniform (silver or gold stars on a gray 
field). 



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Of the eight enlisted ranks, only a sergeant (Wachtmeister) or 
above is considered an NCO. There are two warrant officer 
ranks — Offiziersstellvertreter and Vizeleutnant. The lowest com- 
missioned rank of officer candidate (Fahnrich) — is held by cadets 
at the military academy and by reserve officers in training for the 
rank of second lieutenant. To maintain conformity with grade levels 
in the civil service, there are only two ranks of general in the per- 
sonnel system — brigadier general (one star) and lieutenant gener- 
al (three stars). However, the ranks of major general (two stars) 
and full general (equivalent to four stars) are accorded to officers 
holding particular military commands (see fig. 14). 

Military Justice 

Sections 533 to 684 of the national criminal code deal with mili- 
tary offenses; there is no separate military code of justice, and there 
is no legal (judge advocate) organization in the armed forces. All 
actions in serious criminal cases involving military personnel, ex- 
cept those related to breaches of military discipline, are remanded 
to civil courts. The same holds true in wartime, although specific 
courts would be designated for military cases. Although no mili- 
tary person can be tried twice on the same charge, he can appear 
before an all-military disciplinary commission to be judged on pure- 
ly military aspects of a crime. 

For example, if a military person is accused of murder on an 
army base, military authorities notify the civil police, and the ac- 
cused is taken into civil custody and tried before a civil court. The 
investigation, court, judges, and legal personnel are the same as 
those involved had the incident occurred among civilians. If the 
court finds the defendant guilty, it may sentence him to life im- 
prisonment. The defendant is then called before a military disci- 
plinary commission made up of military personnel. Commission 
members include, among others, servicemen of the same rank and 
from the same branch as the accused. The commission does not 
reconsider evidence relating to the crime, but it divests the defen- 
dant of his military rank, dishonorably discharges him from the 
service, and forfeits his pay and allowances up to the time of the 
action. Disciplinary commissions at the level of the Ministry for 
National Defense have professional lawyers on, or acting as ad- 
visers to, the commission; those at lower organizational levels or- 
dinarily do not. 

Unit discipline complies with accepted practice in nearly all armed 
forces. Infractions of the code of military discipline (military- specific 
offenses such as absence without leave or insubordination) are taken 
care of by company commanders if the appropriate punishment 



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Austria: A Country Study 




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National Security 



is a reprimand, extra duty, confinement to quarters, or the like. 
Battalion and brigade commanders can hand down somewhat more 
severe punishments, such as reduction in grade or confinement to 
base guardhouses for short periods. 

The Defense Budget 

Austrians traditionally have been reluctant to allocate signifi- 
cant sums for improving the nation's defense. This attitude, com- 
bined with a sluggish economy and uncertainties over the shape 
of the armed forces in the post-Cold War era, has forced the mili- 
tary to postpone equipment acquisitions and to accept compromises 
in performance levels, operational readiness, and maintenance 
standards. 

Set at SI 8. 3 billion (for value of the schilling — see Glossary) in 
1992, and climbing to SI 9.0 billion in 1993, the defense budget 
was higher than in 1989 (SI 7.2 billion) and 1990 (SI 7. 5 billion) 
but was roughly the same in terms of real growth. Having reached 
a peak in 1986, the defense budget declined between 1987 and 1989 
to level off at approximately the 1982 spending rate in real terms. 

The government expects to maintain a relatively constant defense 
budget during the remainder of the 1990s. However, anticipated 
lower expenditures on personnel will permit some expansion in 
equipment procurement and improvement of facilities and infrastruc- 
ture. In 1986 personnel costs absorbed 51 percent of the budget; 
operations, 32 percent; and investment, 17 percent. A downward 
trend in the investment budget has since been reversed. In 1992 
new procurements were expected to reach S6.5 billion, or more 
than one-third of the entire budget. Part of these funds was to be 
allocated to renovating housing and barracks, much of which dates 
from the occupation period after World War II. Some SI .3 billion 
was earmarked for SAMs and air-to-air missiles. 

Austria's defense spending as a proportion of the gross national 
product (GNP — Glossary) is the lowest in Europe, except for Lux- 
embourg. During the 1981-91 decade, annual defense outlays were 
in the range of 1 .0 to 1 .3 percent of GNP, with the lowest percen- 
tage occurring recorded in 1991. Sweden and Switzerland, neu- 
tral countries often compared with Austria, had defense spending 
in 1991 that amounted to 2.8 and 1.9 percent of GNP, respective- 
ly. The Austrian defense budget in 1991 was 2.9 percent of total 
central government expenditure. The corresponding levels for 
Sweden and Switzerland were 6.4 and 19.4 percent, respectively. 
Military expenditures per capita amounted to US$213 in Austria 
in 1991, compared with US$751 in Sweden and US$667 in Switzer- 
land in the same year. In defending the level of defense spending, 



247 



Austria: A Country Study 

an Austrian defense minister asserted that although it was not gener- 
ous, it was sufficient to achieve high standards for the ground forces, 
although air defense remained inadequate. He rejected the com- 
parison with Switzerland, because the Swiss have adopted the more 
ambitious goal of the absolute capability of defending their coun- 
try against attack from any source. 

Domestic and Foreign Sources of Military Equipment 

Austria-Hungary was one of the world's major manufacturers 
of arms. The Skoda company in Bohemia was the largest single 
arms producer, fully meeting the empire's requirements with con- 
siderable output available for export. Under the Second Repub- 
lic, from 1945 to the present, the largely privately owned firm of 
Steyr-Daimler-Puch has accounted for the bulk of Austria's produc- 
tion. Its manufacturing facilities are divided among three divisions. 
The first, Steyr-Mannlicher, produces small arms, notably the 
5.56mm assault rifle, the standard weapon for both readiness and 
militia forces and a popular export item to military and police forces 
in many countries of the world. It is also available in carbine and 
light machine gun versions. The second, Steyr-Allradtechnik in 
Graz, is a producer of all-wheel-drive vehicles and trucks. The third 
Steyr division, Spezialfahrzeuge AG, has developed the Austrian 
Spanish Cooperative Development (ASCOD) family of mechanized 
infantry combat vehicles in conjunction with a Spanish firm. The 
basic version is equipped with a 30mm machine gun and carries 
eight infantry soldiers in addition to a three-man crew. The firm 
has also designed the Pandur armored vehicle for the Austrian army 
as an antitank-missile-launcher platform. 

Noricum, previously a subsidiary of the state-owned United Aus- 
trian Iron and Steel Works (Vereinigte Osterreichische Eisen- und 
Stahlwerke — VOEST; commonly known as VOEST- Alpine), 
manufactures artillery ordnance as well as the GHN-45 155mm 
gun. In 1991 fourteen defendants, including leading executives of 
Noricum and VOEST- Alpine, were sentenced to prison terms for 
violating Austrian neutrality laws by selling 200 GHN-45 howit- 
zers and large quantities of munitions to Iran during the Iran-Iraq 
War of 1980-88. Noricum is also reported to have marketed the 
guns illegally to Iraq. Noricum and Hirtenberger Patronenfabrik, 
another state-owned company implicated in the transactions, were 
later sold to the private firm of Emmerich Assmann, ending the 
government's involvement in arms manufacture. 

The Austrian armaments industry is heavily dependent on ex- 
port markets because the requirements of the country's forces are 
limited, and domestic procurement is open to competition from 



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National Security 



foreign suppliers. Production has to be set at far higher levels than 
can be absorbed domestically in order for manufacture to be eco- 
nomically feasible. Shrinking world demand and mounting sophisti- 
cation of weaponry impose serious pressures on the industry. The 
United States Arms Control and Disarmament Agency has esti- 
mated that during the 1981-91 period, arms exports peaked in 1981 
at US$430 million. They declined minimally until 1987, when they 
dropped sharply to US$60 million and later declined further to 
US$10 million. In only one year, 1981, did arms exports amount 
to as much as 2 percent of total exports. In 1987 and 1988, they 
amounted to 0.2 percent of total exports and to even less in the 
next three years. 

During the first years after its formation in 1955, the Austrian 
army depended heavily on the United States for light weapons, 
trucks, uniforms, and even helmets, with some additional equip- 
ment transferred from the former British occupation forces as well. 
The first aircraft were older Soviet models. The army was initially 
supplied with American M-24 light tanks, which were replaced 
by the M-47. Since the 1970s, the main battle tank has been the 
M-60, which Steyr modernized to the A3 standard beginning in 
1986, using engines and other equipment from the United States. 
Austria also made a major purchase of self-propelled howitzers from 
the United States. Nevertheless, the importance of the United States 
as an arms supplier declined in the 1980s. During the 1985-89 
period, estimates suggested that Austria imported military equip- 
ment valued at US$240 million. The United States was the source 
of US$70 million worth of equipment, and Western Europe ac- 
counted for US$160 million worth of equipment. Very little came 
from France and Britain, and restrictions in the State Treaty 
precluded arms imports from Germany. Sweden — the primary 
source of aircraft and missiles — was believed to be the predominant 
supplier. Austria's purchases of Saab and Draken fighters from 
Sweden were largely offset by Swedish orders for Austrian mu- 
nitions. 

Internal Security 

Respect for the law and devotion to social tranquillity are en- 
grained in the Austrian character. Domestic groups committed to 
violence or terrorism play no significant political role. No major 
strikes, unruly demonstrations, or public unrest have threatened 
the stability of the Second Republic. Because of a high standard 
of living and minimal unemployment, crime remains relatively low. 
Assaults and other crimes involving violence are particularly un- 
common, although crimes against property have risen more than 



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Austria: A Country Study 

10 percent in some years. Law enforcement agencies are efficient 
and are regarded with respect. Since the late 1980s, however, in- 
stances of mistreatment of arrested persons and improper activi- 
ties of the organs of security have made necessary measures to 
restore the public's confidence in the police. 

Austria has been the country of first asylum for 2 million refu- 
gees from Eastern Europe since the end of World War II. Aus- 
tria's hospitality toward refugees underwent a change in the early 
1990s as political refugees were outnumbered by economically moti- 
vated immigrants seeking work. Feeling it necessary to stem the 
flow, Austrian authorities tightened entry requirements and rein- 
forced regular border guards with armed forces, mainly to prevent 
illegal Romanian immigrants from entering the country through 
Hungary. Beginning in mid- 1991, thousands of Yugoslavs were 
allowed into Austria as a result of civil war in their country, although 
more than 100,000 were turned back at the point of entry. As of 
May 1993, about 65,000 refugees had been admitted from the 
former Yugoslavia. 

Austria is a frequent setting for international negotiation and 
conciliation, and individuals representing a wide spectrum of be- 
liefs are permitted to carry out political activities without interfer- 
ence within its borders. In addition to being the headquarters of 
the International Atomic Energy Agency (IAEA) and the Organi- 
zation of the Petroleum Exporting Countries (OPEC), Vienna is 
the site of major East-West negotiations. Austria has traditionally 
maintained good relations with many Middle Eastern states, and 
various Arab groups are allowed to operate freely in Austrian ter- 
ritory. 

There is perhaps a price to be paid for this tolerance, however. 
Several terrorist incidents have been linked to situations in the Mid- 
dle East, one of the worst occurring at an OPEC meeting in Vien- 
na in 1975 when three men were killed, many were wounded, and 
thirty-three hostages were taken from among the Arab leaders at- 
tending. Attacks against Jewish targets in 1981 and among pas- 
sengers awaiting a flight on El Al, the Israeli airline, at the Vienna 
airport in 1975 led to the imprisonment of several Arab terrorists. 
In 1987 the former Libyan ambassador to Austria, who was an 
opponent of Muammar al Qadhafi's regime in Libya, was wounded 
in an assassination attempt. In 1989 three Kurdish activists, in- 
cluding the leader of the Iranian Kurdish Democratic Party, were 
assassinated during a meeting with three Iranian officials. Criti- 
cism was leveled against Austrian authorities for their failure to 
curb the activities of the Libyan and Iranian diplomatic missions, 
whose personnel were implicated in the attacks. 



250 



An Austrian-manned United Nations checkpoint 

on the Golan Heights 
Courtesy United States Department of Defense 

Prior to the adoption of an autonomy agreement in 1969, agita- 
tion among German- speaking residents of South Tirol (in the region 
of Trentino-Alto Adige) for its return to Austrian control from Italy 
was accompanied by a campaign of terrorist bombings. In 1967 
army units were moved to the border area to support the Gendar- 
merie and border police in preventing Austrian territory from be- 
ing used as a sanctuary and source of explosives. Terrorist incidents 
dropped off sharply thereafter, although, after an unsuccessful at- 
tempt to derail a train in 1988, a South Tirolean was sentenced 
by an Austrian court to a five-and-one-half-year prison term (see 
Regional Issues, ch. 4). 

According to public opinion surveys, anti-Semitism continues 
to exist in Austria to some extent, and some Austrians remain pro- 
Nazi (see Attitudes Toward Minorities, ch. 2). Although freedom 
of assembly and association are provided for in the constitution, 
the State Treaty of 1955 and previous legislation made an excep- 
tion in the case of Nazi organizations and activities. In early 1992, 
the security authorities cracked down on the neo-Nazi network af- 
ter one group, the Trenck Military Sports Group, was found to 
have handguns and automatic weapons and to engage in paramili- 
tary training. Police intelligence discovered that the groups had 



251 



Austria: A Country Study 

received funds and propaganda material from the United States 
and Canada. Moreover, thousands of names of sympathizers had 
reportedly been found in the files of Gottfried Kiissel, a central 
figure in the neo-Nazi movement. 

Penal Codes 

Early criminal codes merely listed crimes — their definitions were 
considered self-evident or unnecessary — and provided for the ex- 
treme punishments characteristic of the Middle Ages. The codes 
did not presume to list all possible crimes, and a judge was autho- 
rized to determine the criminality of other acts and to fix sentences 
at his discretion. The first unified crime code was enacted in 1768, 
during the reign of Empress Maria Theresa. Investigation, prose- 
cution, and defense were all in the hands of a judge. The code 
contained illustrated directions for the application of "painful in- 
terrogation"; that is, torture, if the judge entertained suspicions 
regarding a defendant. Torture was outlawed a few years later, 
however. The Josephine Code of 1787, enacted by Joseph II, de- 
clared that there was "no crime without a law"; thus, an act not 
defined as a crime was not a crime. Although it was a humanitari- 
an document, the code had shortcomings that were remedied to 
a considerable extent by the codes of 1803 and 1852. A modern 
code of criminal procedure adopted in 1873 provided that ordi- 
nary court proceedings had to be oral and open. Capital punish- 
ment, which was prohibited for a time after 1783, was reinstituted 
and remained a possible punishment until 1950. Imprisonment in 
chains and corporal punishment were abolished in the mid- 1800s. 

The Austrian criminal code and code of criminal procedure were 
riddled with Nazi amendments between 1938 and 1945 after the 
Anschluss, but each code was restored to its 1938 status when the 
country regained independence. Revisions of the criminal code in 
the mid-1960s, based on ten years of work by a legal commission, 
give strong emphasis to the principle of government by law and 
allow unusual latitude in determining appropriate punishment and 
its implementation. Austria attempts to distinguish among law- 
breakers whose crimes are committed on impulse, those who are 
susceptible to rehabilitation, and those who are addicted to crime 
and are incorrigible. Further reforms of the criminal code in 1974 
emphasized the importance of avoiding jail sentences whenever pos- 
sible because of the potentially antisocial effects of even a short 
prison term. Vagrancy, begging, and prostitution are specifically 
decriminalized. In large communities, prostitution is regulated by 
health authorities, and prostitutes and brothels are registered. Indi- 
vidual local jurisdictions retain the authority to prohibit prostitution, 



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National Security 



however. Provisions in the 1974 law modified the punishment for 
business theft and shoplifting and restricted the definitions of riot- 
ous assembly and insurrection. 

Criminal Court Proceedings 

Persons suspected of committing a crime can be held in inves- 
tigative or pretrial detention for no more than forty-eight hours. 
Persons held on charges of "aggressive behavior" can be held for 
up to seven days before appearing before a magistrate. With the 
agreement of a magistrate, an accused may be held for up to a max- 
imum of two years pending completion of an investigation. Domes- 
tic critics of the provisions concerning pretrial detention have 
pointed out that of those detained in Vienna, only 57 percent were 
eventually found guilty of crimes justifying prison sentences. The 
basis for investigative detention is set forth in law, as are condi- 
tions for release on bail. 

Criminal offenses are categorized either as crimes — those cases 
in which the possible sentence is from three years to life imprison- 
ment — or misdemeanors, covering all other cases. Misdemeanor 
cases for which the jail sentence cannot exceed six months are heard 
by one judge in district courts. Cases where the possible sentence 
is no more than three years (five years for burglaries) are heard 
in courts of first instance before one judge; if the punishment is 
in excess of three years, the case is heard before two judges and 
two lay assessors. Assize courts consist of three judges and eight 
lay assessors and hear cases where the potential sentence is of five 
years to life imprisonment. They also rule on such special crimes 
as high treason. 

Members of the judiciary are appointed for life and are indepen- 
dent of the other branches of government. Trials are open to the 
public. The accused are provided with a written statement of the 
charges against them and have the right to be represented by 
counsel. 

Police 

The earliest urban police force was Vienna's City Guard of 1569, 
consisting of 150 men. By the beginning of the Thirty Years' War 
(1618-48), the City Guard consisted of 1,000 men organized as 
a regiment, individual companies of which took part in military 
campaigns. The soldiers of the guard were subject to the authority 
of the Imperial War Council, and the city was required to pay for 
their services. In 1646 the city set up its own Public Order Watch; 
serious frictions between the two bodies resulted in their replace- 
ment by a new service under a commissioner of police in 1776. 



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Austria: A Country Study 

Its personnel were still made up of soldiers, either volunteers or 
assigned, but they failed to meet the city's needs because of a lack 
of training and continuity of service. Police functions were organized 
in a similar form in other large cities of the empire. It was not un- 
til a series of reforms between 1850 and 1869 that military influence 
over the police force was finally ended with the introduction of an 
independent command structure, a permanent corps of police 
professionals, training of officers in police skills, and distinctive uni- 
forms and symbols of rank. 

The Gendarmerie was created by Emperor Franz Joseph I in 
1850 after the disorder and looting that accompanied the uprising 
of 1848. Initially composed of eighteen regiments and part of the 
army, its operational command was transferred to the Ministry 
for Interior in 1860 and wholly severed from the armed forces in 
1867. Nevertheless, training, uniforms, ranks, and even pay re- 
mained patterned after the army. A special Alpine branch was 
formed in 1906, mainly to protect the part of Tirol that bordered 
Italy. Alpine rescue operations and border patrols have remained 
an important Gendarmerie function. 

As of 1993, the more important law enforcement and security 
agencies were organized under the General Directorate for Public 
Security of the federal Ministry for Interior. The directorate is 
divided into five units: the Federal Police; the Gendarmerie cen- 
tral command; the State Police (secret service); the Criminal In- 
vestigation Service; and the Administrative Police. Security 
directorates in each of the nine provinces are also under supervi- 
sion of the General Directorate for Public Security. Each of these 
is organized into a headquarters division, a state police division, 
a criminal investigation division, and an administrative police di- 
vision. 

Contingents of the Federal Police (Bundespolizei) are stationed 
in Vienna and thirteen of the larger cities. As of 1990, approxi- 
mately one-third of the population of Austria lived in areas receiv- 
ing Federal Police protection. The Gendarmerie accounts for nearly 
all of the remaining areas. A few small Austrian localities still have 
their own police forces separate from the Federal Police or the Gen- 
darmerie. The Federal Police are responsible for maintaining peace, 
order, and security; controlling weapons and explosives; protect- 
ing constitutional rights of free expression and assembly; controll- 
ing traffic; enforcing environmental and commercial regulations; 
enforcing building safety and fire prevention rules; policing pub- 
lic events; and preventing crime. A mobile commando group is 
organized in each city directorate, in addition to a four-platoon 
"alarm group" in Vienna and a special force to maintain security 



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National Security 



at the international airport. In early 1992, it was announced that 
150 officials would be assigned to special units reporting directly 
to the Ministry for Interior to fight organized crime. 

As of 1990, the Federal Police had a personnel complement of 
10,000 in the regular uniformed service (Sicherheitswache — 
Security Watch) and 2,400 plainclothes police in the Criminal In- 
vestigation Service. Federal Police contingents are armed with Glock 
17 9mm pistol and truncheons. These can be supplemented with 
the standard army weapon, the Steyr 5.56mm automatic rifle, as 
well as various kinds of riot-control equipment. A separate wom- 
en's police corps serves in the cities, principally to oversee school 
crossings and to assist with traffic control. As of 1990, about twenty- 
four women served in the Gendarmerie and sixty- six in the Feder- 
al Police, mostly to deal with cases involving women, youth, and 
children. 

The secret service branch of the Federal Police, the State Police 
(Staatspolizei; commonly known as Stapo) specializes in counter- 
terrorism and counterintelligence. It also pursues right-wing ex- 
tremism, drug trafficking, illicit arms dealing, and illegal technology 
transfers. It performs security investigations for other government 
agencies and is responsible for measures to protect national lead- 
ers and prominent visiting officials. Members of the State Police 
are chosen from volunteers who have served for at least three years 
in one of the other security agencies. 

Numbering 11,600 in 1990, the Gendarmerie has responsibili- 
ties similar to the Federal Police but operates in rural areas and 
in towns without a contingent of Federal Police or local police. There 
is one member of the Gendarmerie for each 397 inhabitants in the 
areas subject to its jurisdiction and one member of the Federal Police 
for each 316 residents in the cities it patrols. 

The Gendarmerie is organized into eight provincial commands 
(every province, except Vienna), ninety district commands, and 
1,077 posts. A post can have from as few as three to as many as 
thirty gendarmes; most have fewer than ten. The provincial head- 
quarters is composed of a staff department, criminal investigation 
department, training department, and area departments compris- 
ing two or three district commands. Basic Gendarmerie training 
is the responsibility of the individual provincial commands, each 
of which has a school for new recruits. Leadership and specialized 
courses are given at the central Gendarmerie school in Modling 
near Vienna. The basic course for NCOs is one year; that for Gen- 
darmerie officers lasts two years. 

The Gendarmerie has its own commando unit, nicknamed Kobra, 
as do the separate provincial commands employing gendarmes with 



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Austria: A Country Study 

previous experience in Kobra. Alpine posts and high Alpine posts 
are served by 750 Gendarmerie Alpinists and guides. In 1988 more 
than 1,300 rescue missions were conducted, many with the aid of 
Agusta-Bell helicopters in the Gendarmerie inventory. Members 
of the Gendarmerie are armed with 9mm Browning-type semi- 
automatic pistols. They also have available American M-l car- 
bines and Uzi machine pistols. 

The Administrative Police, in addition to maintaining the bulk 
of routine police records and statistics, work on import-export vio- 
lations, illegal shipments of such items as firearms and pornographic 
materials, and alien and refugee affairs. Customs officials are or- 
dinarily in uniform; other Administrative Police dress according 
to the needs of their assignments. 

The late 1980s witnessed a growing incidence of complaints al- 
leging police misconduct and unnecessary use of force. The minister 
for interior reported that there had been 2,622 allegations of ill- 
treatment by the police between 1984 and 1989, of which 1,142 
resulted in criminal complaints leading to thirty-three convictions 
against police officers. In addition, 120 disciplinary investigations 
were carried out, and disciplinary measures were taken against 
twenty-six police officers. However, victims of police misbehavior 
were liable to be deterred from pressing their complaints because 
of the risk of being charged with slander by the accused officers. 
A new police law that went into effect in May 1993 stipulates more 
clearly the limitations on police conduct and imposes restrictions 
on holding persons on charges of aggressive behavior without an 
appearance before a magistrate. In addition, leaflets are to be given 
to detained or arrested persons setting out their rights, including 
the right to call a lawyer and to have their own doctors if medical 
examinations are required. 

In 1990 it was disclosed that the State Police had extensively 
monitored the activities of private citizens without sufficient justifi- 
cation. Security checks had been carried out for private compa- 
nies on request. Of some 11,000 citizens who inquired whether 
they had been monitored, some 20 percent were found to have State 
Police files. These actions appeared to be in violation of laws pro- 
tecting personal data collected by the government, public institu- 
tions, and private entities, as well as constitutional protection of 
the secrecy of the mail and telephone. These revelations gave rise 
to a restructuring of the State Police, including the reduction of 
its staff from 800 to 440. The new police law that came into effect 
in 1993 also introduces parliamentary control over the State Police 
and the military secret police, with oversight to be exercised by 
separate parliamentary subcommittees. 



256 



National Security 



Incidence of Crime 

The Austrian police recorded 400,000 cases of criminal conduct 
during 1988; some 79,000 were defined as crimes, an increase of 
nearly 10 percent over 1987. The number of misdemeanors — 
21,000 — represented an increase of less than 1 percent. By far the 
largest category of crimes consisted of offenses involving property 
(74,343). Only 283 crimes against life and limb were recorded, and 
1,167 moral offenses of a criminal nature were recorded. Among 
misdemeanors, offenses against property totaled over 202,000, and 
offenses against life and limb totaled nearly 80,000. The police 
reported that 4,963 persons were accused of narcotic offenses and 
that fifty kilograms of heroin, 215 kilograms of marijuana, and four- 
teen kilograms of cocaine had been seized. In the battle against 
the drug trade, Austria maintains contact with drug authorities in 
the United States and Canada as well as with authorities in other 
European countries and coordinates its enforcement efforts through 
the International Criminal Police Organization (Interpol). There 
is considerable evidence that international drug dealers are taking 
advantage of Austria's laws on banking anonymity to launder drug 
receipts. New restrictions were announced in early 1992 that re- 
quire the identity of customers for all transactions above S200,000 
and for all currencies, not just for dollars as had previously been 
the case. 

Responding to an Interpol questionnaire on the kinds of infrac- 
tions recorded, Austria reported the following offenses in 1988: 
homicides, 139; sexual crimes, 2,834, of which 336 were rapes; 
serious assaults, 120; all categories of theft, 189,794; armed or vio- 
lent robbery, 2,317; and fraud, 19,904. Of those arrested, 11.0 
percent were women, and 4.5 percent were juveniles between the 
ages of fourteen and seventeen. Noncitizens accounted for 15 to 
20 percent of most criminal acts but were responsible for 23.5 per- 
cent of armed or violent robberies and 36 percent of counterfeit- 
ing cases. 

The police reported that nearly 95 percent of crimes and mis- 
demeanors involving threats to life and limb had been successfully 
resolved. Only 25 percent of thefts of all categories were solved; 
arrests occurred in 71 percent of sex offenses. 

Penal System 

All prisons from local jails to maximum security institutions are 
regulated by the Ministry for Interior. Revisions to penal statutes 
adopted in 1967 emphasize rehabilitation, education, work, prison 



257 



Austria: A Country Study 

wages, and assistance to prisoners on their return to society. Pro- 
grams stress the humane treatment and rehabilitation of inmates, 
but program implementation is often inhibited by restricted prison 
budgets and lack of facilities. 

Regulations stipulate that all able-bodied prisoners will be put 
to useful work. If proceeds from an individual's work exceed the 
cost to the state of his maintenance, the prisoner is paid a wage. 
Part can be used for pocket money, and the remainder is paid to 
the offender after release. Where facilities are inadequate or the 
situation justifies work or education beyond what is available on 
the prison grounds, those not considered dangerous or likely to at- 
tempt to escape can work or attend classes in the nearby area. 

The penal system in Austria includes seven penitentiaries (Gar- 
sten, Graz, Hertenberg, Schwarzau, Stein, Suben, and Vienna- 
Simmering); three institutions of justice; two special institutions; 
and eighteen jails at the seats of courts of first instance. In spite 
of the rising crime rate, the prison population fell steadily from 
7,795 in 1987 to 5,975 at the end of 1989. The average prison popu- 
lation of 6,318 in 1988 was composed of 6,054 males and 264 fe- 
males. The rate of incarceration was seventy- seven per 100,000 
population, typical for Europe as a whole but higher than some 
Scandinavian countries. Those on supervised probation numbered 
4,930—2,762 adults and 2,168 juveniles. 

The number held in investigative detention also declined, from 
1,666 in 1987 to 1,466 in late 1989. This reduction was attributed 
to implementation in 1988 of the law easing the requirements for 
conditional release. According to Austrian authorities, the num- 
ber of detainees had been reduced to a level corresponding to the 
European average. 

* * * 

Much of the information in the foregoing chapter on the Aus- 
trian army's strength and equipment is based on The Military Balance, 
1993-1994. Under the heading "JDW Country Survey: Austria" 
in Jane's Defence Weekly, several articles describe the New Army 
Structure plan of the defense establishment, with charts showing 
the proposed organizational pattern. The concepts underlying Aus- 
tria's defense policies prior to the New Army Structure are set forth 
in "Defense Policy from the Austrian Point of View" by Emil Span- 
nocchi. Detail on the army's structure, weaponry, and strategic 
plans as of 1986 is included in Friedrich Wiener's Die Armeen der 
neutralen und blockfreien Staaten Europas. 



258 



National Security 



The annual Country Reports on Human Rights Practices produced 
by the United States Department of State summarizes the opera- 
tion of the criminal justice system and the internal security agen- 
cies. Das grosse Buck der Polizei und Gendarmerie in Osterreich by Friedrich 
Jager gives an account of the functioning of the various police or- 
ganizations from the Middle Ages to the present day. (For further 
information and complete citations, see Bibliography.) 



259 



Appendix 



Table 

1 Metric Conversion Coefficients and Factors 

2 Population, Selected Years, 1600-1991 

3 Population by Province, 1951, 1981, and 1991 

4 Population of Official Ethnic Groups, Selected Years, 1910-81 

5 Overview of Education System, Academic Year 1990-91 

6 Enrollment of Students Aged Ten to Fourteen, Selected Aca- 

demic Years, 1960-61 to 1990-91 

7 University Attendance, Selected Academic Years, 1955-56 to 

1991-92 

8 Principal Causes of Death by Gender, 1989 and 1990 

9 Gross Domestic Product by Sector, Selected Years, 1960-90 

10 Labor Force by Sector, 1970, 1980, and 1990 

11 Distribution of Trade, 1970, 1980, and 1990 

12 Balance of Payments, 1989 and 1991 

13 Selected Nationalrat Election Results, 1945-90 

14 Presidents of Austria, 1945- 

15 Governments of Austria, 1945- 

16 Major Military Equipment, 1993 



261 



Appendix 



Table 1. Metric Conversion Coefficients and Factors 



When you know 


Multiply by 


To find 




OA 


inches 




0.39 


inches 




3.3 


feet 


\C 1 1 nmptprQ 


62 


miles 


T_r„„t QT -„ c /in ooo 


9 4.7 


acres 




0.39 


square miles 


Cubic meters 


35 3 


cubic feet 




0.26 


gallons 




2.2 


pounds 


Metric tons 


0.98 


long tons 




1.1 


short tons 




2,204 


pounds 


Degrees Celsius 


1.8 


degrees Fahrenheit 



(Centigrade) and add 32 



Table 2. Population, Selected Years, 1600-1991 
(in thousands) 



Year Population Year Population 



1600 1,800 1960 7,047 

1700 2,100 1970 7,467 

1800 3,064 1980 7,549 

1850 3,650 1985 7,558 

1900 6,004 1990 7,718 

1930 6,684 1991 7,796 



Source: Based on information from Austria, Osterreichisches Statistisches Zentralamt, 
Statistisches Jahrbuch fir die Republik Osterreich, 1993, Vienna, 1993, 13. 



263 



Austria: A Country Study 

Table 3. Population by Province, 1951, 1981, and 1991 
(in thousands) 



Province 1951 1981 1991 



Burgenland 276 270 271 

Carinthia 475 536 548 

Lower Austria 1,400 1,428 1,474 

Salzburg 327 442 482 

Styria 1,109 1,187 1,185 

Tirol 427 587 631 

Upper Austria 1,109 1,270 1,333 

Vorarlberg 194 305 331 

Vienna 1,616 1,531 1,540 



TOTAL * 6,934 7,555 7,796 



* Figures may not add to totals because of rounding. 

Source: Based on information from Austria, Osterreichisches Statistisches Zentralamt, 
Statistisches Jahrbuch far die Republik Osterreich, 19y3, Vienna, 1993, 13. 



Table 4. Population of Official Ethnic Groups, Selected Years, 1910-81 



Czechs 

Year Croats Slovenes and Slovaks Hungarians 



1910 44,243 74,210 119,447 26,570 

1951 34,427 42,095 4,118 5,566 

1971 28,084 23,579 7,967 1 14,815 2 

1981 22,371 18,371 5,168 12,415 



1 Increase caused by naturalization of Czech and Slovak asylum seekers after Warsaw Pact invasion 
of Czechoslovakia in 1968. 

2 Increase caused by naturalization of Hungarian asylum seekers after failed Hungarian Revolution of 
1956. 

Source: Based on information from Jim Sweeney and Josef Weidenholzer (eds.), Austria: 
A Study in Modern Achievement, Aldershot, United Kingdom, 1988, 252. 



264 



Appendix 



Table 5. Overview of Education System, Academic Year 1990-91 



Type of 


Number 


Number 


Number 


Institution 


of Schools 


of Teachers 


of Students 


Preschool and 








kindergarten 


4,715 


16,794 


217,414 


Elementary and 








middle schools 


5,074 


68,953 


648,719 


Basic vocational school 


238 


4,530 


149,806 




747 




67 207 




299 


18,292 * 


99J09 


Teacher-training 










44 


7,121 


10,227 


Academic high school 


325 


17,999 


83,801 


Vocational college 


44 


155 


2,863 


Teacher-training college 


27 


1,715 


6,281 




18 


11,511 


192,928 



* Includes teachers at middle vocational schools. 



Source: Based on information from Austria, Osterreichisches Statistisches Zentralamt, 
Statistisches Jahrbuch far die Republik Osterreich, 1992, Vienna, 1992, 75. 



Table 6. Enrollment of Students Aged Ten to Fourteen, Selected Academic 
Years, 1960-61 to 1990-91 



Year AHS 1 HS 2 Ratio AHS:HS 



1960-61 50,773 205,965 1:4.1 

1970-71 81,232 308,935 1:3.8 

1980-81 102,743 367,611 1:3.6 

1990-91 92,818 238,953 1:2.6 



1 Allgemeinbildende Hbhere Schule (higher school of general education). Provides schooling leading to univer- 
sity study or advanced technical training. 

2 Hauptschule (middle school). Provides compulsory general education. 

Source: Based on information from Austria, Osterreichisches Statistisches Zentralamt, 
Statistisches Handbuch fur die Republik Osterreich, 1991, Vienna, 1991, 80. 



265 



Austria: A Country Study 



Table 7. University Attendance, Selected Academic Years, 
1955-56 to 1991-92 



Students Percentage of Percentage of Degrees 

Year Enrolled Males Females Awarded 



1955-56 19,124 80 20 2,970 

1960-61 38,533 77 23 3,257 

1970-71 53,152 75 25 6,025 

1980-81 115,616 60 40 8,047 

1990- 91 192,928 56 44 9,694 

1991- 92 201,615 56 44 n.a. 



n.a. — not available. 

Source: Based on information from Austria, Osterreichisches Statistisches Zentralamt, 
Statistisches Jahrbuch fur die Republik Osterreich, 1992, Vienna, 1992, 80. 



Table 8. Principal Causes of Death by Gender, 1989 and 1990 
(per 100,000 of the same gender) 



1989 1990 



Cause 


Males 


Females 


Males 


Females 


Cardiovascular diseases 


505.4 


329.7 


477.9 


317.2 




263.5 


160.9 


262.7 


159.5 




99.5 


37.9 


94.8 


35.2 


Respiratory diseases 


58.2 


25.2 


58.7 


26.3 


Cirrhosis of the liver 


42.7 


13.1 


41.9 


13.2 


Suicide 


35.6 


12.5 


33.8 


11.5 


Other 


69.4 


68.6 


70.4 


69.7 


TOTAL 


1,074.3 


647.9 


1,040.2 


632.6 



Source: Based on information from Austria, Osterreichisches Statistisches Zentralamt, 
Statistisches Handbuch fur die Republik Osterreich, 1991, Vienna, 1991, 441; and Aus- 
tria, Osterreichisches Statistisches Zentralamt, Statistisches Jahrbuch fur die Republik 
Osterreich, 1992, Vienna, 1992, 453. 



266 



Appendix 



Table 9. Gross Domestic Product by Sector, 
Selected Years, 1960-90 
(in percentages) 



S c or 
ec or 


1960 


1970 


1 Qftn 


1 0,0.0 


• 




o.y 




5. 1 




36.6 


34.4 


28.3 


26.6 




2.8 


2.8 


3.1 


2.5 






8.2 


8.2 


7.0 




15.5 


18.1 


16.8 


16.4 


Transportation and communications 


6.0 


5.9 


5.8 


6.2 


Property administration 


6.2 


8.4 


12.0 


16.7 




2.9 


3.0 


3.2 


4.0 


Less imputed bank service charges 


-2.3 


-3.1 


-4.5 


-5.8 


Other 


. . . . 10.9 


11.9 


13.7 


13.8 




2.7 


3.5 


0.6 


0.7 


Value-added tax 


. . . . n.a. 


n.a. 


8.5 


8.8 


TOTAL * 


100.0 


100.0 


100.0 


100.0 



n.a. — not available. 

* Figures may not add to totals because of rounding. 



Source: Based on information from Austria, Osterreichisches Statistisches Zentralamt, 
Statistisches Handbuch fur die Republik Osterreich, 1991, Vienna, 1991, 210. 



Table 10. Labor Force by Sector, 1970, 1980, and 1990 
(in percentages of total work force) 



Sector 


1970 


1980 


1990 




18.8 


10.5 


7.9 


Mining and quarrying 


1.0 


0.6 


0.4 




30.0 


29.5 


27.0 




1.1 


1.3 


1.2 




8.2 


8.8 


8.4 


Wholesale and retail trade, restaurants, and hotels .... 


14.2 


17.1 


18.6 




6.3 


6.3 


6.4 


Finance, insurance, and business services 


3.4 


5.0 


6.5 




16.5 


20.8 


23.7 


Activities not adequately defined 


0.3 


0.1 




TOTAL * 


100.0 


100.0 


100.0 



— means negligible. 

* Figures may not add to totals because of rounding. 

Source: Based on information from Austria, Osterreichisches Statistisches Zentralamt, 
Statistisches Handbuch fur die Republik Osterreich, 1991, Vienna, 1991, 108; and 
Organisation for Economic Co-operation and Development, OECD Economic Sur- 
veys, 1991-1992: Austria, Paris, 1992, 160-61. 



267 



Austria: A Country Study 



Table 11. Distribution of Trade, 1970, 1980, and 1990 
(in percentages) 





1970 


1980 


1990 


Exports 








EC 1 


39.4 


55.2 


64.5 


EFTA 2 


25.3 


12.4 


10.1 




12.9 


12.1 


8.5 


OPEC 4 




5.6 


2.7 


West Germany 


23.4 


30.8 


36.7 




10.4 


7.5 


6.9 


Italy 


9.7 


11.0 


9.8 


Britain 


6.1 


3.7 


3.9 


United States 


4.1 


2.2 


3.2 


Netherlands 


2.9 


2.6 


2.9 


Soviet Union 


2.9 


2.7 


2.2 




2.2 


3.5 


4.8 


Japan 


0.5 


0.8 


1.6 


Imports 








EC 


56.0 


62.4 


68.3 


EFTA 


19.1 


7.9 


7.1 


Eastern Europe 


9.3 


9.7 


6.0 


OPEC 




7.1 


2.1 


West Germany 


41 2 


40.8 


43.7 




7.4 


5.0 


4.3 




6.8 


2.7 


2.6 


Italy 


6.5 


9.1 


9.1 


France 


3.5 


3.9 


4.2 




3.4 


3.4 


3.6 




2.9 


2.7 


2.8 




2.2 


4.2 


1.8 


Japan 


1.0 


2.4 


4.5 



n.a. — not available. 

1 European Community. In November 1993, it became known as the European Union. 

2 European Free Trade Association. 

3 Does not include the Soviet Union. 

4 Organization of the Petroleum Exporting Countries. 



Source: Based on information from Austria, Osterreichisches Statistisches Zentralamt, 
Statistisches Handbuch fur die Republik Osterreich, 1972, Vienna, 1972, 196-97; Aus- 
tria, Osterreichisches Statistisches Zentralamt, Statistisches Handbuch fur die Republik 
Osterreich, 1982, Vienna, 1982, 369; and Austria, Osterreichisches Statistisches Zen- 
tralamt, Statistisches Handbuch fur die Republik Osterreich, 1991, Vienna, 1991, 310. 



268 



Appendix 



Table 12. Balance of Payments, 1989 and 1991 
(in millions of United States dollars) 





1989 


1991 


Merchandise exports, f.o.b. * 


. . . 31,832 


40, 136 




oo Aon 


— Dz, loo 


Trade balance 


-6,605 


- 12,050 




18,814 


26,064 






- 12,524 










- 7,965 


- 11,693 




-57 


166 


Official unrequited transfers (net) 


-72 


- 108 




59 


-252 


Direct investment (net) 


- 66 


- 768 


Portfolio investment (net) 


1,197 


574 




- 300 


211 


Capital account balance 


831 


17 




106 


1,107 




996 


872 



* f.o.b. — free on board. 



Source: Based on information from The Europa World Year Book, 1993, 1, London, 1993, 412. 



269 



Austria: A Country Study 



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270 



Appendix 



Table 14. Presidents of Austria, 1945- 



Name Years in Office Party Allegiance 



Karl Renner 1945-50 SPO 1 

Theodor Korner 1951-57 -do- 
Adolf Scharf 1957-65 -do- 
Franz Jonas 1965-74 -do- 
Rudolf Kirchschlager 1974-86 -do- 
Kurt Waldheim 1986-92 OVP 2 

Thomas Klestil 1992- -do- 



1 Sozialistische Partei Osterreichs (Socialist Party of Austria). In 1991 the name changed to Social 
Democratic Party of Austria (Sozialdemokratische Partei Osterreichs — SPO). 

2 Osterreichische Volkspartei (Austrian People's Party). 



Table 15. Governments of Austria, 1945- 



Chancellor and 

Period in Power Party Affiliation Parties in Government 



1945 Karl Renner (SPO) 1 SPO, OVP 2 , KPO 3 

1945-49 Leopold Figl (OVP) -do- 

1949-53 -do- SPO, OVP 

1953-56 Julius Raab (OVP) -do- 

1956-59 -do- -do- 

1959-61 -do- -do- 

1961-64 Alphons Gorbach (OVP) -do- 

1964-66 Josef Klaus (OVP) -do- 

1966-70 -do- OVP 

1970-83 Bruno Kreisky (SPO) SPO 

1983-86 Fred Sinowatz (SPO) SPO, FPO 4 

1986- Franz Vranitzky (SPO) SPO, OVP 



1 SPO — Sozialistische Partei Osterreichs (Socialist Party of Austria). In 1991 the name changed to 
Social Democratic Party of Austria (Sozialdemoktatische Partei Osterreichs — SPO). 

2 OVP — Osterreichische Volkspartei (Austrian People's Party). 

3 KPO — Kommunistische Partei Osterreichs (Communist Party of Austria). 

4 FPO — Freiheitliche Partei Osterreichs (Freedom Party of Austria). 

Source: Based on information from Jim Sweeney and Josef Weidenholzer (eds.), Austria: 
A Study in Modern Achievement, Aldershot, United Kingdom, 1988, 278-79. 



271 



Austria: A Country Study 

Table 16. Major Military Equipment, 1993 



Type and Description Country of Origin In Inventory 



Army 



Main battle tanks 






M-60A3 


United States 


169 


Armored personnel carriers 






Saurer 4K-4E/F 


Austria 


465 


Tank destroyers 






Kiirassier SK-105 


-do- 


285 


Self-propelled artillery 






M-109A2 155mm howitzers 


United States 


54 


Towed artillery 






IFH (M-2A1), 105mm 


-do- 


108 


M-114, 155mm 


-do- 


24 


Fortress artillery 






SFK M-2, 155mm 


Sweden 


24 


Mortars 






M-2, 107mm 


United States 


102 


M-43, 120mm 


Austria 


274 


Multiple rocket launchers 






M-51, 130mm 


Czechoslovakia 


18 


Antitank guided missiles 






RBS-56 BILL 


Sweden 


118 


Antitank guns 






M-52/-55, 85mm 


Czechoslovakia 


240 




United States 


60 


Centurion tank turrets, 105mm . . . 


Britain 


200 


Air defense guns 






M-58 Oerlikon, 20mm 


Switzerland 


560 


Oerlikon twin, towed, 35mm 


-do- 


74 


M-42 twin, self-propelled, 40mm . . 


United States 


38 


ir force 






Fighter/ground attack aircraft 






Saab 1050 


Sweden 


30 


Fighter aircraft 






Draken J-350e 


-do- 


24 


Helicopters 






Agusta-Bell AB-212, medium, 








Italy 


23 


Agusta-Bell AB-204, light, 






transport 


-do- 


8 


Bell OH-58B Kiowa, 








United States 


12 


A-316B Alouette III, search and air 








France 


24 


Light transport/liaison 






Short Skyvan 3M 


Britain 


2 


Pilatus PC-6B Turbo Porter 


Switzerland 




Air defense weapons 






M-65 twin Oerlikon, 35mm guns . . 


-do- 


18 



Source: Based on information from The Military Balance, 1993-1994, London, 1993, 72. 



272 



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tices for 1993. (Report submitted to United States Congress, 103d, 
2d Session, House of Representatives, Committee on Foreign 
Affairs, and Senate, Committee on Foreign Relations.) Washing- 
ton: GPO, 1994. 

. Department of State. Patterns of Global Terrorism, 1989. 

Washington: 1990. 

Vetschera, Heinz. "Austria." Pages 59-77 in Richard E. Bissell 
and Curt Gasteyger (eds.), The Missing Link: West European Neu- 
trals and Regional Security. Durham: Duke University Press, 1990. 

Wiener, Friedrich. Die Armeen der neutralen und blockfreien Staaten Eu- 
ropas: Organisation, Kriegsbild, Waff en, und Gerat. Vienna: Ueber- 
reuter, 1986. 



285 



Austria: A Country Study 

Zeger, Hans G., et al. Alpen-Stasi: die II. Republik in Zerrspiegel der 
Staatspolizei. Linz: Edition Sandkorn, 1990. 

(Various issues of the following periodicals were also used in the 
preparation of this chapter: DMS Market Intelligence Report; Economist 
Intelligence Unit, Country Report: Austria [London]; Foreign Broad- 
cast Information Service, Daily Report: West Europe; Jane's Defence 
Weekly [London]; New York Times; and Washington Post.) 



286 



Glossary 



Bretton Woods system — Established in 1944, the system aimed at 
stabilizing exchange rates by fixing the price of gold at US$35 
per troy ounce. Other currencies were linked to the system ac- 
cording to their exchange rates with the United States dollar. 
The system was replaced by one of floating exchange rates in 
the early 1970s. See also European Monetary System (EMS). 

d'Hondt method — Also known as the highest-average method of 
determining the allocation of seats to political parties after an 
election. The d'Hondt method was devised by a Belgian, Vic- 
tor d'Hondt, to be used in electoral systems based on propor- 
tional representation. In addition to Belgium, the method has 
been adopted by Austria, Finland, Portugal, and Switzerland. 
Under this method, voters do not choose a candidate but vote 
for a party, each of which has a published list of candidates. 
The party winning the most votes in a constituency is award- 
ed the area's first seat, which goes to the candidate at the top 
of the winning party's list. The total vote of this party is then 
divided by two, and this amount is compared with the totals 
of the other parties. The party with the greatest number of votes 
at this point receives the next seat to be awarded. Each time 
a party wins a seat, its total is divided by the number of seats 
it has won plus one. The process continues until all the seats 
in a constituency are awarded. The d'Hondt method slightly 
favors large parties. 

European Community (EC) — See European Union (EU). 

European Economic Area (EEA) — An economic area encompass- 
ing all the members of the European Union (EU — q. v. ) and 
the European Free Trade Association (EFTA — q. v.), with the 
exception of Switzerland. Created in May 1992, the EEA went 
into effect on January 1, 1994. The EEA is a single market 
for the free movement of labor, services, capital (with some 
restrictions on investments), and most products. EFTA mem- 
bers have agreed to accept EU regulations in many areas, in- 
cluding company law, education, environmental protection, 
mergers, and social policy. 

European Economic Community (EEC) — See European Union 
(EU). 

European Free Trade Association (EFTA) — Founded in 1960, 
EFTA aims at supporting free trade among its members and in- 
creasing the liberalization of trade on a global basis, particularly 



287 



Austria: A Country Study 

within Western Europe. In 1993 the organization's member 
states were Austria, Finland, Iceland, Liechtenstein, Norway, 
Sweden, and Switzerland. 

European Monetary System (EMS) — Established in 1979 by the 
European Economic Community (EEC — q. v. ), the EMS was 
created to stabilize currency values because the Bretton Woods 
system (q. v.) proved not fully satisfactory. 

European Monetary Union (EMU) — The EMU is a plan for a sin- 
gle European central bank and for a single European currency 
to replace national banks and currencies for those European 
states that qualify. 

European Union (EU) — Until November 1993, the EU was known 
as the European Community (EC). The EU comprises three 
communities: the European Coal and Steel Community (ECSC), 
the European Economic Community (EEC), and the European 
Atomic Energy Community (Euratom). Each community is 
a legally distinct body, but since 1967 they have shared com- 
mon governing institutions. The EU forms more than a frame- 
work for free trade and economic cooperation: the signatories 
to the treaties governing the communities have agreed in prin- 
ciple to integrate their economies and ultimately to form a 
political union. Belgium, France, Italy, Luxembourg, the 
Netherlands, and the Federal Republic of Germany (West Ger- 
many) were charter members of the EU; Britain, Denmark, 
and Ireland joined on January 1 , 1973; Greece became a mem- 
ber on January 1, 1981; and Portugal and Spain entered on 
January 1, 1986. 

exchange rate mechanism (ERM) — Mechanism established in 1979 
to regulate currency exchange rates in the European Monetary 
System (EMS — q.v.). Member currencies are permitted to fluc- 
tuate in value only within a narrow margin (the so-called snake). 

gross domestic product (GDP) — The total value of goods and ser- 
vices produced by the domestic economy during a given period, 
usually one year. Obtained by adding the value contributed 
by each sector of the economy in the form of profits, compen- 
sation to employees, and depreciation (consumption of capi- 
tal). Most GDP figures in this book are based on GDP at factor 
cost. Real GDP is the value of GDP when inflation has been 
taken into account, 
gross national product (GNP) — Obtained by adding the gross 
domestic product (GDP — q. v. ) and the income received from 
abroad by residents, less payments remitted abroad to nonresi- 
dents. Real GNP is the value of GNP when inflation has been 
taken into account. 



288 



Glossary 



Hare system — Also known as the single transferable vote formula. 
The Hare system was developed in the nineteenth century by 
Thomas Hare, a British political reformer, to create constituen- 
cies with multiple representatives in electoral systems based on 
proportional representation. Ballots are used on which a voter 
may rank his or her choices in order of preference. Any candi- 
date who has received enough first-preference votes to meet 
a quota wins a seat. Votes above this quota are transferred to 
the candidates with second-preference votes, and each of those 
who meet the quota is awarded a seat. The process continues 
until all seats in a constituency are filled. 

Organisation for Economic Co-operation and Development 
(OECD) — Established in 1961 to replace the Organisation for 
European Economic Co-operation (OEEC), the OECD is an 
international organization composed of the industrialized mar- 
ket economy countries (twenty-four full members as of 1993). 
The OECD seeks to promote economic and social welfare in 
member countries, as well as in developing countries, by provid- 
ing a forum in which to establish and coordinate policies. 

Organisation for European Economic Co-operation (OEEC) — 
See Organisation for Economic Co-operation Development 
(OECD). 

schilling (S) — National currency. Consists of 100 groschen. In re- 
lation to the United States dollar, the average annual exchange 
rate was S13.2 in 1989, S11.4 in 1990, S11.7 in 1991, S11.0 
in 1992, and SI 1.4 in 1993. 

Western European Union (WEU) — Founded in 1948 to facilitate 
West European cooperation in economic, social, cultural, and 
defense matters. Reactivated in 1984 to concentrate on the 
defense and disarmament concerns of its members, the WEU 
is headed by a council consisting of its members' ministers of 
foreign affairs and defense. The council meets twice a year; 
lower-level WEU entities meet with greater frequency. In late 
1993, WEU members included Belgium, Britain, France, Ger- 
many, Greece, Italy, Luxembourg, the Netherlands, Portu- 
gal, and Spain. 



289 



Index 



abortion, 83, 103; church opposition to, 
xxvii, 102; as controversial issue, 61; 
legalized, 62, 81 

acquired immune deficiency syndrome 
(AIDS), 112 

Adler, Viktor, 190 

Administrative Court, 180, 181, 186 

Administrative Police, 224, 254, 256 

Advisory Committee for Economic and 
Social Questions, 139 

Afghanistan: immigrants from, 84; Soviet 
invasion of, 216 

Agrarian League (Landbund), 36 

agricultural: credit cooperatives, 158; 
policy, 143-44; production, 146 

agriculture, 143-46; in the Alps, 73; 
decline in, xxvi, 140, 143; employment 
in, 68, 136, 141, 145; government role 
in, 143-45; as percentage of gross 
domestic product, xxvi, 141, 143; price 
controls for, 144; quotas for, 144; in so- 
cial partnership, xxxvi, 138, 144; struc- 
ture of, 145-46; subsidies for, xxx, 132, 
144-45 

AIDS. See acquired immune deficiency 
syndrome 

air force, 223, 242-44; aircraft of, 230; 
insignia, 244; materiel, 241; mission of, 
242; number of personnel, 234; organi- 
zation of, 244; ranks, 245; training, 
244; uniforms, 244 

Alemanni. See Swabians 

Alexander I, 20 

Allied Council, 51 

Allied occupation, 48-56, 228; distribu- 
tion of power in, 50-51; economy un- 
der, 122-26; end of, 4, 56; legacy of, 
4; national identity under, 79; nation- 
alization under, xxvi, 52, 124-25; zones 
in, 50-51 

Allies: economic support by, 54, 121, 122; 
position of, on Austria, 48 

ALO. See Alternative List of Austria 

Alps, 70-73; agriculture in, 73; climate in, 
75; tourism in, 156; transit through, 75 

AL Technologies, 142 

Alternative Liste Osterreichs. See Alter- 
native List of Austria 



Alternative List of Austria (Alternative 
Liste Osterreichs — ALO): in elections 
of 1983, 63, 201; in elections of 1986, 
201; platform of, 200 

Amnesty Act (1948), 53 

Anabaptists, 9-10 

Andrassy, Gyula, 29 

Anschluss {see also Nazi occupation), xxiv, 
3, 44-47, 228; constitution suspended 
under, 169; debate over, 94, 206; desire 
for, 22, 24, 29, 36, 38, 39, 121; econo- 
my under, 121; end of, 50; impact of, 
on national identity, 79; international 
reactions to, 44; support for, 37, 45 

anti-Semitism, xxiv, 32, 37, 93, 251; de- 
bate over, 94; under Nazi occupation, 
46 

Arab-Israeli conflict, 216 
Arbeiterzeitung, 211 

Arbeitsbeirat. See Labor Advisory Council 
Arbeitskammertag. ^Chamber of Labor 

Conference 
Argentina: immigrants from, 84 
aristocracy, 95; political power of, 32 
armed forces {see also air force; army): 
commander in chief, 233-34; conscien- 
tious objectors, 239; conscription in, 
226, 230, 234; exemptions from service 
in, 239; in Habsburg Empire, 224-26; 
materiel of, 223; missions of, 230; 
mobilization of, 226; morale of, 228; 
and neutrality, 232-33; number of per- 
sonnel in, 223, 226, 234, 240; organi- 
zation of, 223; reserves, 226, 231; 
restructuring of, 223; women in, 240 
army {see also air force), 223, 235-37; ac- 
tive units of, 235; conscripts in, 237-40; 
demobilization of, 237; deployment of, 
237; insignia, 244; materiel, 241-42; 
mission of, 234; number of personnel 
in, 228, 234, 237; organization of, 229, 
235; ranks, 245; reconstituted, 228; 
term of service in, 239; training of, 235; 
uniforms, 244 
attorneys, 183 
Augustinians, 13 

Ausgleich (Compromise) of 1867, 26, 
226; implemented, 27 



291 



Austria: A Country Study 



Austria: in Dual Monarchy, 27; establish- 
ment of, after World War I, 35, 38-39; 
etymology of, 6, 7; in Quadruple Alli- 
ance, 20 

Austria, Duchy of, 6-7 

Austria, Margravate of, 6 

Austria- Hungary (see also Dual Monar- 
chy), xxi-xxiii, 26-35, 226; Balkans 
partitioned by, 29; Bosnia and Herce- 
govina acquired by, 29-30, 33; in Dual 
Alliance, 30; foreign relations of, 
27-28; government of, 27; materiel 
produced by, 248; migration within, 
86; in Triple Alliance, 30, 34; war 
declared on Serbia by, 34; in World 
War I, 34 

Austrian Airlines, 156; privatized, 128, 
132, 156 

Austrian Airtransport, 156 

Austrian Federal Railroad (Osterreichische 
Bundesbahnen— OBB), 142, 152 

Austrian Industries (see also nationaliza- 
tion): branches of, 142, 147; number 
of employees in, 142; restructured, 127, 
128 

Austrian People's Party (Osterreichische 
Volkspartei — OVP) (see also Christian 
Social Party), xxviii-xxxii, 4, 50, 194- 
97, 217; auxiliary organizations of, 
195-96; economy under, 127; in elec- 
tion of 1945, 51; in election of 1949, 54; 
in election of 1971, 61; in election of 
1983, 63; in election of 1986, 190, 206; 
in election of 1990, 190, 207, 208; in 
election of 1991, 209; in election of 
1992, 209; in election of 1994, xxxi- 
xxxii; in grand coalition, xxviii, 56-60, 
167, 190, 195; in single-party govern- 
ment, 56-60; modifications in, 52-53; 
national conferences of, 195; newspaper 
of, 211; organization of, 195; platform 
of, 195; popularity of, 58; special in- 
terests of, 189 

Austrian Radio and Television (Oster- 
reichischer Rundfunk— ORF), 156, 212 

Austrian Spanish Cooperative Develop- 
ment, 248 

Austrian Trade Union Federation (Oster- 
reichischer Gewerkschaftsbund — 
OGB), 136; membership in, 136; po- 
litical role of, 175; in social partnership, 
125, 134, 138, 139 

Austria Tabakwerke, 142 



Austro-Hungarian Empire. See Austria- 
Hungary 

Austro-Piedmontese War (1859), 225 
Avars, 5 



Babenberg family, 6 
Badeni, Kasimir, 31 
balance of payments, 159-60 
balance of trade, 160 
Balkan League, 33 

Balkan Peninsula: foreigners from, 94; 
partition of, 29; rivalries in, 29 

Balkan War, First (1912), 33 

Balkan War, Second (1913), 33 

Bank Austria, 143, 158 

banking, 158-59; regulation of, 136; sav- 
ings, 159 

banks, 158; agricultural credit coopera- 
tives, 158; mortgage, 158; people's, 
158; savings, 158 
Baroque era, 13-15 
Basic Law (1867), 170 
Battle of Austerlitz (1805), 225 
Battle of Custozza (1866), 225 
Battle of Koniggratz (1866), 26, 225 
Battle of Lechfeld (955), 6 
Battle of Lissa (1866), 225 
Battle of Magenta (1859), 225 
Battle of Mohacs (1526), 9 
Battle of Solferino (1859), 225 
Battle of Wagram (1809), 225 
Battle of White Mountain (1620), 12 
Bauer, Otto, 38, 40 
Bavarians, 3, 5 
Benedictines, 13 
Berlin blockade (1948), 55 
Beust, Friedrich Ferdinand von, 26 
Billa grocery stores, 150 
birth control, 83; effect of, on population, 
81 

Blecha, Karl, 207 

Bohemia, 9, 12; ethnic tensions in, 31; 

German speakers in, xxii; immigrants 

from, 88; Maria Theresa as queen of, 15; 

religious restrictions in, 12; riots in, 31 
Bohemian Granite Massif, 73 
Bonaparte, Napoleon: marriage of Marie 

Louise to, 19; opposition to, 18, 225 
borders, 69; set by Congress of Vienna, 

19; set by Treaty of St. Germain, 

38-39, 86 



292 



Index 



Bosnia and Hercegovina: annexation of, 

by Austria-Hungary, 29, 30-31, 33 
Bosnians: as refugees, 85 
Brandt, Willy, 60 
Bregenz, 74 

Brenner Pass, 75; pollution in, 76; tran- 
sit through, 76, 152 

Bretton Woods system, 126, 158, 162 

Britain: in Crimean War, 25; in Europe- 
an Free Trade Association, 217; 
materiel from, 249; occupation of Aus- 
tria by, xxiv-xxv, 48-56; in Quadru- 
ple Alliance, 20; reaction of, to 
Anschluss, 44; relations with, 15, 21; 
in World War I, xxiii, 34 

budget: structure of, 128 

budget deficit: efforts to limit, 127; in 
magic pentagon, 130; in 1970s, 126; as 
percentage of gross domestic product, 
126, 127; servicing, 127 

Bulgarian Orthodox Church: official 
recognition of, 102 

Bundesbank (Germany), 129, 130, 162; 
stability policy of, 140 

Bundesheer (Federal Army). See army 

Bundespolizei. See Federal Police 

Bundesrat (Federal Council), 171, 179; 
established, 39; number of seats in, 
179; powers of, 179 

Bundesversammlung (Federal Assembly), 
169, 179-80 

Bundeswirtschaftskammer. See Federal 
Economic Chamber 

Burgenland, 69; emigration from, 80; 
ethnic composition of, 87-88, 90; seats 
in Bundesrat for, 179 

Busek, Erhard, 197 



cabinet, 171-72, 174-75; appointments 
to, 174-75; dismissal of, 175; members 
of, 174-75; powers of, 174 

Calvinists, 102, 103 

Cambodia: United Nations observer mis- 
sions in, 233 

Canada, 252 

CAP. See Common Agricultural Policy 
Carinthia, 69; ethnic composition of, 62, 
87, 88; ethnic tensions in, 88; Haider 
as governor of, 198-99; political affili- 
ation in, 200; seats in Bundesrat for, 



179; tourism in, 156; Yugoslavia's 

desire for, 88 
Carinthia, Duchy of, 6 
Carolingian Empire, 5-6 
Carter, Jimmy, 216 
Catholic Church, Old: official recognition 

of, 102 

Catholic Church, Roman: concordat of 
1855, 25, 32; concordat of 1934, 43, 47; 
concordat of 1960, 59; government re- 
lations with, 25, 42-43, 102; members 
of, xxvii, 102, 103; under Nazi occu- 
pation, 47, 102; official recognition of, 
102; political power of, xxvii, 32, 36, 
102, 103, 189, 191, 194; reestablish- 
ment of, 13; schools run by, 104 

Catholic League: formed, 12 

Catholics, Roman: conflicts of, with Prot- 
estants, 11-12 

Celtic era, 4-5 

central bank. See Nationalbank 

Central Flying School, 244 

Central Office for Jewish Emigration 

(Zentralamt jiidischer Auswanderung — 

ZjA), 46 

Chamber of Labor Conference (Arbeits- 
kammertag), 135 

chambers of agriculture, 134-35, 143, 189, 
196; functions of, 134, 135, 137; mem- 
bership in, 133-34; organization of, 134; 
in social partnership, 120, 125, 138 

chambers of commerce, 134, 189, 196; es- 
tablished, 134; functions of, 134, 137; 
membership in, 133-34; organization 
of, 134; reform of, 208; in social part- 
nership, 120, 125, 138 

chambers of labor, 135, 189, 196; estab- 
lished, 135; functions of, 134, 135, 137; 
membership in, 133-34; organization 
of, 134; reform of, 208; in social part- 
nership, 120, 125, 138 

chancellor, 171-72, 174-75; powers of, 
174, 234; role of, 174 

Charlemagne, 5 

Charles II, 14 

Charles V: territories of, 8-9 
Charles VI, 14 
Charles Albert, 15 
Chile: immigrants from, 84 
Christian Corporatist State, 102 
Christianity {see also under individual denomi- 
nations): conversion to, 6; evangeliza- 
tion in, 5-6 



293 



Austria: A Country Study 



Christian Social Party (Christlichsoziale 
Partei — CSP) (see also Austrian People's 
Party), xxiii-xxiv, xxviii, 32, 35, 
36-37, 42, 102, 194; in elections of 
1920, 40; in elections of 1930, 41; 
militias of, 227; platform of, 36-37, 39 

Christlichsoziale Partei. See Christian So- 
cial Party 

Church of Jesus Christ of Latter-Day 

Saints. See Mormon Church 
church taxes, 104 

Circle of Free Business Persons (Ring 
Freiheitlicher Wirtschaftstreibender — 
RFW), 189 

Cis-Leithania (see also Austria), 27 

Cistercians, 13 

City Guard of Vienna, 253 

civil code of 1811, 21 

civil service, 183-84; military personnel 
in, 239; popular view of, 183; Proporz 
system in, xxviii-xxix, 183; reform of, 
184; training academy for, 184 

climate: Atlantic maritime, 75, 76-77; 
characteristics of, 75-76; continental, 
75; Mediterranean, 75, 76, 77; and pol- 
lution, 76-77 

coal: consumption of, 150; imports of, 
149; sources of, 39 

Columban, Saint, 5 

Comecon. See Council for Mutual Eco- 
nomic Assistance 

Common Agricultural Policy (CAP), 145, 
161 

Common Market. See European Com- 
munity 

communications. See telecommunications 
Communist Party of Austria (Kom- 
munistische Partei Osterreichs — KPO), 
38, 50; in election of 1945, 51; in elec- 
tion of 1949, 54; outlawed, 42; popular- 
ity of, 59 

Comprehensive National Defense strate- 

gy, 230 

Compromise of 1867. See Ausgleich of 
1867 

concentration camps: deaths in, 80, 90, 

91; prisoners in, xxv, 52, 90 
Conference of Presidents of the Chambers 

of Agriculture, 134 
Conference on Security and Co-operation 

in Europe (CSCE), 157, 216 
Congo: United Nations peacekeeping 

forces in, 232 



Congress for the Future, 193 

Congress of Vienna (1814-15), 19-21 

Congress System, 20 

constituent assembly, 22, 23 

Constitutional Court, 178, 180-81, 186; 
members of, 180-81; president of, 180 

constitutional framework, 168-71 

constitution of 1849, 24 

constitution of 1867 ("December Consti- 
tution"), 27; religious freedom under, 
102 

constitution of 1918, 35 

constitution of 1920: amendments to, xxv, 
168-69, 170-71; freedom of expression 
under, 210; individual rights under, 
170; neutrality under, 213; suspended, 
169, 172 

constitution of 1934, 42-43 

corporatist system, 189 

Council for Mutual Economic Assistance 
(Comecon): trade with, 162 

Council of the Austrian Chambers of 
Labor, 139 

Council of Trent (1545-63), 10 

Counter- Reformation, 3, 11-13, 101; ori- 
gins of, 10; policies, 13 

coup d'etat, attempted: of 1934, xxiv, 43 

Court of Arbitration, 182 

courts: administrative, 180, 181; of ar- 
bitration, 182; constitutional, 178, 
180-81; criminal, 253; district, 182; 
labor, 182; patent, 182; Proporz system 
in, 181; regional, 181-82; superior, 
181; supreme, 181 

Crankshaw, Edward, 226 

Creditanstalt: collapse of, 41 

Creditanstalt-Bankverein, 143, 158; 
privatized, 132 

credit institutions: nationalized, 124-25 

crime: categories of, 253; investigative de- 
tention for, 253; military, 245; rate, 
249-50, 257; trials for, 253 

Crimean War (1853-56), 25 

crimes, war, 4, 53 

Criminal Investigative Service, 224, 254 
Croatia, 223; economic relations with, 

162-63; recognition of, 219 
Croats, xxii, 56; as ethnic minority, 87, 

88, 89; immigration by, 5; under Nazi 

occupation, 46; rights for, 62, 171 
CSCE. See Conference on Security and 

Co-operation in Europe 
CSP. See Christian Social Party 



294 



Index 



currency {see also schilling): common Eu- 
ropean, 120; policies, 120 

current account: balance, 119; in magic 
pentagon, 130; in 1970s, 126 

customs union, 160 

Cyprus: United Nations peacekeeping 

forces in, 213, 224, 232 
Czech language, 31 

Czechoslovakia: creation of, 35; German- 
speaking minorities in, 86; population 
of, 39; refugees from, 81; in revolution 
of 1989, 218; Warsaw Pact invasion of, 
58, 83, 230 

Czech Republic, 223; border with, 69; 
joint venture agreements with, 162 

Czechs: in Austria-Hungary, xxii, 27, 86, 
88; as ethnic minority, 87, 89; govern- 
ment of, in exile, 35; as guest workers, 
92; immigration by, 5, 83, 88; under 
Nazi occupation, 46; parliament boy- 
cotted by, 30; political participation by, 
23, 31; as refugees, 83 



Deutsche Arbeiterpartei. See German 
Workers' Party 

deutsche mark {see also currency; schill- 
ing): schilling tied to, 120, 130, 158, 
162 

divorce, 98; causes of, 99; rate, xxvii, 

98-99, 103 
Dollfuss, Engelbert, xxiv, 41, 227; killed, 

43 

Dollfuss government, xxiv, 41-43; fascist 
support for, 41; political parties under, 
42, 191; state of emergency under, 42, 
169 

Drau River, 70 

Drau River Valley: transit through, 75 
Dual Alliance, 30 

Dual Monarchy {see also Austria-Hun- 
gary): founded, 26-27; nationalities 
in, 27; negotiations for, 25; organiza- 
tion of, 26-27 



Dachau: politicians imprisoned at, 52 
Dairy Board, 144 
Danube Confederation, 78-79 
Danube River, 70; transportation on, 155 
Danube River Basin, 73; climate in, 75; 

as defense zone, 231 
Das Liberale Forum. See Liberal Forum, 

The 

deaths: causes of, 111; in concentration 
camps, 80; in World War I, 80; in 
World War II, 80 

debt servicing, 120, 127 

December Constitution. See constitution 
of 1867 

defense, national, 233-49 

defense industry, domestic, 241, 248; ex- 
ports, 248-49 

defense spending: budget, 247-48; in 
Habsburg Empire, 225; as percentage 
of gross national product, 247; reluc- 
tance regarding, 247 

de Gaulle, Charles, 57 

demography, 80-86 

denazification, 53 

Denmark: in European Free Trade As- 
sociation, 217; military intervention by, 
12 



East Germany. See Germany 
EC. See European Community 
economic collapse of 1873, 31 
Economic Commission: established, 125 
economic infrastructure: under Nazi oc- 
cupation, 46 
economic reform, 127-30 
economic stabilization plan, 40, 121, 125 
economy: adapting to European Commu- 
nity standards, 161; Allied support for, 
54-55, 121, 125-26; and decline in 
agriculture, xxvi, 143; interwar, xxv, 
39; under Metternich, 22; moderniza- 
tion of, xxvi, 46; under Nazi occupa- 
tion, 45-46; structure of, xxvi, 140-43 
Edict of Tolerance (1781), 16 
education {see also schools), 104-9; access 
to, xxvii, 68, 95; foreign children in, 
106-7; government responsibility for, 
192; higher, xxvii, 107-9; policy, 109; 
reform of, 106, 107; rigidity of, 105-6; 
technical, 106; two-track, 105; voca- 
tional, xxvii, 101, 106; of women, 101; 
of working class, 107 
EE A. See European Economic Area 
EEC. See European Economic Com- 
munity 

EFTA. See European Free Trade As- 
sociation 



295 



Austria: A Country Study 



Egypt: United Nations peacekeeping for- 
ces in, 213 

elections: of 1919, 38; of 1920, 40; of 
1930, 41; of 1938 (Nazi plebiscite), 
44-45; of 1945, 51-52; of 1949, 54; of 
1970, 61, 192, 198; of 1971, 61, 192; 
of 1975, 61, 192; of 1979, 61, 192; of 
1983, 63, 198, 200, 201; of 1986, 190, 
201, 205-7; of 1990, 200, 207-8; of 
1991, 208-9; of 1992, 209; of 1993, 
210; of 1994, xxxi-xxxii 

electoral system, 186-88; districts in, 186; 
reform of, 61, 186, 208; vote-counting 
procedures in, 186-88 

electric power: consumption of, 150; dis- 
tribution of, 150; generation of, 119, 
150; hydroelectric power, 119, 149, 150 

emigration, 46, 68, 80-81, 86, 91; from 
Eastern Europe, 83-84; from East Ger- 
many, 84 

Emmerich Assmann, 248 

employment: benefits, 61, 110; distribu- 
tion of, 124; in magic pentagon, 130; 
policies, 192; in retail trade, 150; of 
women, 83 

Employment of Foreigners Law (1991), 
92 

EMS. See European Monetary System 
EMU. See European Monetary Union 
energy: consumption of, 149-50; policies, 
149 

energy installations: nationalized, 124-25 
energy sector, 149-50; imports by, 149; 

regulation of, 136 
Enlightenment: influence of, 16 
Enns River, 70 

environmental damage: as controversial 
issue, xxx, 61, 76-78, 167, 200-201, 
217, 218; and decline in agriculture, 
143, 144; to forests, 77; from north- 
western Europe, 76-77, 217, 218; from 
road traffic, 76, 155; from tourism, 
77-78 

equal rights law of 1976, 100 
Equal Treatment Law (1979), xxviii, 100 
ethnic groups (see also under ethnic minori- 
ties and individual groups): in Austria- 
Hungary, xxii, 27, 86 
Ethnic Groups Law (1976), 89 
ethnic minorities, 86-94; attitudes 
toward, 93-94; criteria of identification, 
88-89; in Czechoslovakia, 86; in Ita- 
ly, 86-87; population of, 87, 89; rights 



for, 61, 62 
Eugene of Savoy (prince), 14, 224 
Europe: balance of power in, 21, 25, 
27-28, 29; borders of, redrawn, 19; 
common currency for, 120; liberal up- 
risings of 1830s in, 21; system of alli- 
ances in, 34 
Europe, Eastern: energy imports from, 
149; immigrants from, 83-84, 94; joint 
ventures in, 120, 129, 162; refugees 
from, xxxii, 68, 81, 85, 94, 250; trade 
with, 162 
Europe, Western: exports to, 119 
European Community (EC) (see also Eu- 
ropean Union): attempts to join, xxx, 
119, 160, 161, 168, 216-18; trade with, 
217 

European Economic Area (EEA), 163; 

formed, 119, 161; membership in, xxvi, 

xxx, 127, 143, 210; negotiations on, 155 
European Economic Community (EEC): 

formed, 57; trade with, 63 
European Free Trade Association 

(EFTA), xxvi, 57, 160-61; formed, 57; 

members of, 119, 160, 210, 217; trade 

with, 161 

European Monetary System (EMS), 156; 
membership in, 162 

European Monetary Union (EMU), 156, 
161-62; convergence requirements for, 
161-62; membership in, 161 

European Recovery Program. See Mar- 
shall Plan 

European Telecommunications Satellite 
Organisation (Eutelsat), 156 

European Transfer Express Freight Train 
System, 155 

European Union (EU) (see also European 
Community), 73; membership in, xxvi, 
xxx-xxxi, xxxiii, 168, 196, 210, 218, 
233; trade in, 121 

Eutelsat. See European Telecommunica- 
tions Satellite Organisation 

Evangelical Union: attempts to join, 119; 
formed, 12 

Exchange for Agricultural Products, 182 

exchange rate, 158 

exports (see also under individual products), 
127, 159, 160; decline in, 129; of elec- 
tricity, 150; to Germany, 119, 129; of 
machinery and equipment, 160; of mili- 
tary materiel, 248-49; subsidies for, 
144; to Western Europe, 119 



296 



Index 



families, 96-101; benefits, 113-14; 

changes in, 68; division of labor in, 100; 

illegitimacy in, 99; single-parent, 98; 

single-person, 98; size of, 96 
farms: labor devoted to, 145-46; number 

of, 145; size of, 145 
Fasslabend, Werner, 232 
Fatherland Front (Vaterlandische Front), 

42 

Federal Army. See army 
Federal Assembly. See Bundesversamm- 
lung 

Federal Chamber of Trade and Com- 
merce, 134, 137, 139 

Federal Chancellery, 174, 176 

Federal Council. See Bundesrat 

Federal Economic Chamber (Bundeswirt- 
schaftskammer). See Federal Chamber 
of Trade and Commerce 

Federal Law on the Press and Other Jour- 
nalistic Media (1982), 211-12 

Federal Police (Bundespolizei), 224, 
254-55; deployment of, 254; duties of, 
254; materiel of, 255; number of per- 
sonnel in, 255; organization of, 254-55; 
women in, 255 

Federal Republic of Germany. See Ger- 
many 

Federation of Austrian Industrialists 
(Vereinigung Osterreichischer Indus- 
trieller— VOI), 134, 137-38; func- 
tions of, 137-38; membership of, 137 

Ferdinand I: career of, 9; death of, 11; 
peace agreement of, with Turks, 11; 
religion under, 10 

Ferdinand I of Austria, 21; abdication of, 
23 

Ferdinand II, 12 
Ferdinand III, 13 

Figl, Leopold, 56; as chancellor, 51, 54 
Finance Equalization Law, 185 
financial markets, 159 
Financial Times "European 500," 143 
First Republic (1918-38), 35-44; found- 
ed, 38; political factions in, xxv, 35r- 
38 

Fligerdi vision. See air force 

food: prices, 145, 191; production, 119; 

sources of, 39 
foreigners: political campaign against, 

xxix-xx, xxi, 199, 209-10 
foreign exchange: controls on, 128 
foreign investment, 163 



foreign loans, 40 

foreign policy: under Franz Joseph, 26; 
under Kreisky, 62-63, 213-16; in 
1950s, 56-58; in 1960s, 57-58; in 1980s 
and 1990s, xxx-xxxi, xxxii-xxxiii, 
216-20 
foreign relations, 213-20 
foreign workers. See guest workers 
forestry: employment in, 68, 145; subsi- 
dies for, 144-45; workers in, 136 
forests, 73; environmental damage to, 77; 

land area of, 145 
Four Power Control Agreement (1946), 

51-52; veto powers under, 51-52 
Fourteen Points (Wilson), 35 
FPO. See Freedom Party of Austria 
Fraktion Sozialistischer Gewerkschaftler. 

See Group of Socialist Trade Unionists 
France: in Crimean War, 25; materiel 
from, 233, 241, 242, 244, 249; military 
intervention by, 12; occupation of Aus- 
tria by, xxiv-xxv, 48-56; reaction of, 
to Anschluss, 44; relations with, 15, 
27-28; retaliation by, 41; Second 
Republic of, 22; in World War I, xxiii, 
34 

Franche-Comte: in Habsburg Empire, 8 
Franco-Prussian War (1870-71), 28 
Franks, 5 

Franz (husband of Maria Theresa), 15 

Franz I (of Austria), 18; domestic poli- 
cies of, 21-22 

Franz II (of Holy Roman Empire), 18 

Franz Ferdinand (archduke): assassina- 
tion of, xxiii, 33-34, 227 

Franz Joseph I: armed forces under, 225, 
254; crowned, 24; death of, 34; foreign 
policy of, xxi, 26 

Frederick III, 8; as Holy Roman Em- 
peror, 8 

Frederick V, 12 

Frederick the Great, 224 

Free Business Association of Austria 
(Freier Wirtschaftsverband Oster- 
reichs— FWB), 188 

Freedom Party of Austria (Freiheitliche 
Partei Osterreichs — FPO) {see also 
League of Independents), xxix-xxxii, 
58-59, 197-200; auxiliary organiza- 
tions, 200; in election of 1970, 198; in 
election of 1971, 61; in election of 1983, 
63, 198, 200; in election of 1986, 190, 
206; in election of 1990, 190, 200, 207, 



297 



Austria: A Country Study 



208; in election of 1991, 208-9; in elec- 
tion of 1992, 209; in election of 1994, 
xxxi-xxxii; founded, 197; members of, 
59, 197, 200; platform of, 197-98; 
popularity of, 167, 190; structure of, 
200 

Freier Wirtschaftsverband Osterreichs. See 
Free Business Association of Austria 

Freiheitliche Partei Osterreichs. See Free- 
dom Party of Austria 

French Revolution, 18-19 

Frischenschlager, Friedhelm, 193, 202 

FSG. See Group of Socialist Trade Union- 
ists 

FWB. See Free Business Association of 
Austria 



Gail River, 70 

GAL. See Green Alternative/Greens in 

Parliament 
Gall, Saint, 5 

gas, natural: consumption of, 149; import 

of, 149; reserves, 150 
Gastarbeiter . See guest workers 
GDP. See gross domestic product 
Gendarmerie, 224, 251, 254, 255; in Al- 
lied occupation, 228; created, 254; 
functions of, 254, 255-56; materiel of, 
256; misconduct among, 256; number 
of personnel in, 255; organization of, 
255; training of, 255; women in, 255 
General Directorate for Public Security, 
254 

General Law for University Education 
(1966), 104 

General Social Insurance Act of 1955, 109 

geography, 69-78 

geostrategic situation, 228-29 

German Austrians: desire of, for union 
with Germany, 29, 36, 78-80, 188; in 
independent Austria, 35; politics of, 
xxii, xxiii-xxiv, 31, 36, 188 

German Confederation, 19; dissolved, 26; 
restored, 24; revolutions of 1848 in, 22 

German Democratic Republic. See Ger- 
many 

German Front, 33; platform of, 33 
Germanic tribes, 3, 4-5 
German People's Party (Grossdeutsche 
Volkspartei — Nationals), 36, 40; desire 



of, for unification, 39; in elections of 
1919, 38 

German Workers' Party (Deutsche Ar- 
beiterpartei), 36 

Germany: border with, 69; division of, 
55; in Dual Alliance, 30; economic re- 
lations with, 41, 120, 126, 129, 217; 
emigration from, 84; emigration to, 86; 
exports to, 119, 129, 217; influence in, 
25-26, 27-28; relations with, 25, 29; 
trade with, 160; in Triple Alliance, xxi, 
30, 34; in World War I, 34; in World 
War II, xxiv, 47-48 

Gewerbeordnung. See Regulation of the 
Professions 

glasnost, 217 

GNP. See gross national product 

Gorbach, Alphons, 58 

Gorbachev, Mikhail, 217 

government: administrative organization 
of, 69; branches of, 169; liberals in, 
30-31; Nazi Party in, 38; Proporz sys- 
tem in, 54, 167, 175; reduction of, 128; 
relations of, with Catholic Church, 25, 
42-43, 102; reorganization of, in 1848, 
23-24; responsibilities of, 170; role of, 
in agriculture, 143-44 

government, local, 185-86; federal con- 
trols on, 186; powers of, 185; purview 
of, 185-86; role of, 185 

government, provincial, 169-70, 184-85; 
constitution of, 184; dissolution of, 184; 
elections for, 184; executive of, 184; 
legislation of, 184-85; members of, 
184; purview of, 185 

government, provisional, 48-50; recogni- 
tion of, 50-51 

government spending: as percentage of 
gross domestic product, 127, 128 

Grain Board, 144 

grand coalition, xxviii, 56-60, 167, 189, 
190, 205-7, 208; scandals in, 206-7; so- 
cial partnership under, 59-60, 189 

Gratz, Leopold, 207 

Graz: immigrants to, 88; riots in, 31 

Greek Orthodox Church: official recog- 
nition of, 102 

Green Alternative — Freda Meissner-Blau 
List, 201 

Green Alternative/Greens in Parliament 
(Griine Alternative/Grime in Parla- 
ment— GAL), 201 ; in election of 1990, 
208 



298 



Index 



Green parties, xxx, 77, 167, 200-201; in 
election of 1983, 201; in election of 
1986, 190; in election of 1992, 209; in 
election of 1994, xxx, xxxi; future of, 
201; origins of, 200; platforms of, 200, 
217 

Greens, The (Die Griinen), xxx-xxxi 

Grossdeutsche Volkspartei. See German 
People's Party 

gross domestic product (GDP): under Al- 
lied occupation, 125; growth, xxvi, 129; 
in magic pentagon, 130 

gross domestic product fractions: agricul- 
ture, xxvi, 141, 143; budget deficit, 

126, 127, 128; government services, 

127, 128; industry, xxvi, 141, 146; 
mining, 149; retail trade, 150; services 
sector, xxvi, 141; subsidies, 128-29, 
130; trade, xxvi, 159 

Grossglockner Mountain, 70 

Group of Socialist Trade Unionists (Frac- 
tion Sozialistischer Gewerkschaftler — 
FSG), 188, 194 

Griine Alternative/Grime in Parlament. 
See Green Alternative/Greens in Par- 
liament 

Griinen, Die. See Greens, The 
guest workers, xxvii, 75, 87, 89, 91-93, 
95, 119, 132-33; assimilation of, 93; 
entitlements for, 106-7; naturalization 
of, 92; number of, 83, 85, 133; popu- 
lar opinion toward, 93; as percentage 
of work force, xxvii, 133; population 
growth caused by, 81, 92; religious af- 
filiations of, 103; unemployment 
among, 129 
Gypsies, 90-91; as ethnic minority, 87, 
90; geographic distribution of, 90; un- 
der Nazi occupation, 90; popular opin- 
ion toward, 90, 91, 94; population of, 
90; social organization of, 90 



Habsburg, Rudolf von, 7 

Habsburg Dynasty, xxi; branches of, 9; 
inheritable succession in, 8; privileges 
of, 8; rebellions against, 11-12; support 
for, 12-13, 36-37 

Habsburg Empire, xxi-xxiii, 7-11; armed 
forces in, 224-26; borders of, redrawn, 
19; collapse of, 3, 35; division of, 11; 
ethnic groups in, 18; extent of, 3; Hun- 



gary under, 14; organization of, 8; re- 
ligious tolerance in, 101-2; territories 
of, 8-9 

Haider, Jorg, xxix-xxx, xxxi-xxxii, 167, 
190, 198-99, 205-6, 207; background 
of, 198; as governor of Carinthia, 
198-99; ideology of, 198, 199; xeno- 
phobia of, 199, 210 

Hamburg power plant, 193, 202 

health, 111-12; habits, 111 

health benefits, 68 

health care, 112; regulation of, 192 

health care professionals, 112 

health insurance, 112 

Heer, Friedrich, 78 

Heeresgliederung Neu. See New Army 

Structure 
Heimatbloc (Homeland Bloc), 41 
Heimatschutz (Homeland Defense), 

40-41 

Heimwehr (Home Guard), 40-41 ; under 

Dollfuss, 41, 42 
Hercegovina. See Bosnia and Hercegovina 
Hereditary Lands, 8-9, 12; created, 8 
High Tauern Range, 75 
Hirtenberger Patronenfabrik, 248 
Hitler, Adolf, xxiv, 36; meeting of, with 

Schuschnigg, 43-44; plebiscite of 1938 

under, 44-45 
Holstein: control of, 26 
Holy Alliance, 20 

Holy Roman Empire, 6-8; dissolved, 19; 
emperors in, 7-8, 11, 12, 15; organi- 
zation of, 8; origins of, 6 
Home Guard. See Heimwehr 
Homeland Bloc. See Heimatbloc 
Homeland Defense. See Heimatschutz 
hotels, 157 

housing, 114-15; amount of, 114; expen- 
ditures for, 115; ownership of, 114-15; 
standards, 114; vacation, 115 

Hungarian Plain, 73 

Hungarian Revolution (1956), 83 

Hungarians: as ethnic minority, xxii, 87, 
88, 89; government of, in exile, 35; as 
guest workers, 92 

Hungary, 12; border with, 69; captured 
by Habsburg Empire, 14; division of, 
9; independence declared by, 24; joint 
venture agreements with, 162; under 
Maria Theresa, 17; negotiations with, 
25; Protestant rebellion in, 11; recon- 
ciliation with, 26; resistance of, to 



299 



Austria: A Country Study 



Austrian government, 25; in revolution 
of 1989, 218; Soviet invasion of, 58, 
229-30 



immigration, xxvii, xxxi, 68, 80-81, 
83-86; illegal, 85, 94, 209-10, 250; rate 
of, 83; waves of, xxix, 83 

imports, 159, 160; of energy, 149; of 
machinery and equipment, 160; restric- 
tions on, 144 

industrialization, 31-32, 124 

industry, 146-50; under Allied occupa- 
tion, 125; competitiveness of, 147; 
decline in, 140; employment, 141-42; 
geographic distribution of, 146; growth 
of, 68; kinds of firms in, 146-47; na- 
tionalization of, 124; under Nazi occu- 
pation, 45; as percentage of gross 
domestic product, 141, 146; production 
costs in, 132; Proporz system in, 203; 
size of firms in, 142-43, 146; in social 
partnership, 138; subsidies for, 132 

inflation: under Allied occupation, 125; 
interwar, 121; in magic pentagon, 130; 
in 1970s, 126; policies, 130 

inland waterways, 70, 155 

Innovation and Technology Fund, 132 

Inn River, 70 

Inn River Valley, 75; as defense zone, 231 
Innsbruck, 74 

insurance services: regulation of, 136 

Intelsat. See International Telecommuni- 
cations Satellite Organization 

internal security, 249-58 

International Atomic Energy Agency, 
157, 213, 250 

International Criminal Police Organiza- 
tion (Interpol), 257 

International Telecommunications Satel- 
lite Opanization (Intelsat), 156 

Interpol. See International Criminal Police 
Organization 

investment, 127 

Iran: boycott of, 216; immigrants from, 

84; materiel sold to, 248 
Iranian Kurdish Democratic Party, 250 
Iraq: United Nations observer missions 

on Iraq-Kuwait border, 233 
Iron Ring government, 31 
Islam: official recognition of, 102 



Israel, 216; immigration to, 84; United 
Nations peacekeeping forces in, 213 

Italianization campaign, 87 

Italy, xxi, xxii, 26; border with, 69, 86; 
emigration to, 86; German- speaking 
minorities in, 86; reaction of, to An- 
schluss, 44; relations with, 25, 219; 
South Tirol ceded to, 39, 86-87; sup- 
port of, for Dollfuss, 41; trade with, 
160; in Triple Alliance, 30, 34; in 
World War I, 227 



Jagiellon family, 9 
Jesuits, 13 

Jews, 18, 84, 91; in Austria- Hungary, 86; 
emigration of, 46, 80, 91; as ethnic 
minority, 87, 89; extermination of, 46, 
80, 91; immigration of, 80; political 
participation of, 30, 32; population of, 
46, 91, 93, 103; restrictions on, 16, 91 

JG. See Young Generation 

Jonas, Franz, 58, 61 

Joseph II: death of, 18; penal code un- 
der, 252; reforms under, 16-18, 91 

journalists, 212 

Judaism: official recognition of, 102 
judges, 180, 182, 253; appointment of, 

253; selection of, 181, 182 
judicial system, 180-83 
Junge Generation. See Young Generation 
Jungk, Robert, 209 



Karl (emperor), 34; abdication of, 35 
Kirchschlager, Rudolf, 61 
Klagenfurt, 74 

Klagenfurt Manifesto (1965), 195 

Klaus, Josef, 58, 59 

Klestil, Thomas, 209 

KO. See Konsum Osterreich 

Kommunistische Partei Osterreichs. See 
Communist Party of Austria 

Konsum Osterreich (KO), 142, 152 

Korner, Theodor, 58 

KPO. See Communist Party of Austria 

Kreisky, Bruno, xxviii, 56; background 
of, 60; as chancellor, 202, 216; as party 
chairman, 191-92, 206; use of televi- 
sion by, 174 

Kreisky government, 60-63; civil service 



300 



Index 



under, 184; domestic policy under, 
61-62; foreign policy under, 62-63, 
213-16 

Kiissel, Gottfried, 252 

Kuwait: United Nations observer mis- 
sions on Iraq-Kuwait border, 233 

Labor Advisory Council (Arbeitsbeirat), 
138 

labor unions (see also Austrian Trade 
Union Federation), 188, 217; functions 
of, 136, 137, 139; membership in, 136; 
in social partnership, 120, 125, 138, 
140 

Lager (social camps), xxiii-xxiv, 35, 
95-96, 188-90; decline in, xxvii, xxix, 
194, 196; strength of, 189 
land: arable, 73, 74, 145; area, 69 
Landbund. See Agrarian League 
Landtag. See government, provincial 
land use, 73 
Lauda Air, 156 

Law of October 26, 1955, 56, 171, 232 
League of Austrian Business (Oster- 

reichischer Wirtschaftsbund — OWB), 

188, 195-96 
League of Austrian Farmers (Oster- 

reichischer Bauernbund — OBB), 188- 

89, 196 

League of Austrian Workers and Sal- 
aried Employees (Osterreichischer 
Arbeiter- und Angestelltenbund — 
OAAB), 188, 195 

League of Independents (Verband der 
Unabhangigen — VdU) (see also Free- 
dom Party of Austria; Nazi Party), 
53-54; in election of 1949, 54; forma- 
tion of, 53 

League of Nations: financial support by, 
121 

legal system. See courts 

legislation: preparation of, 176, 178 

Leitha Range, 73 

Leitha River, 27 

Leopold I, 14 

Leopold II, 18 

Liberal Forum, The (Das Liberale Fo- 
rum), xxxi, 167; formed, xxix, 199, 210 
Liberal International, 197, 199, 210 
liberalism: conflict of, with nationalism, 
22-23 

liberals: in government, 30-31 



Liechtenstein: border with, 69 
Linz: immigrants to, 88 
livestock, 73 

Livestock and Meat Commission, 144 
living standards, 68, 120; improvements 

in, 95 
Louis (king), 9 
Louis XIV, 14 
Louis XVI: marriage of, 15 
Lower Austria, 69; seats in Bundesrat for, 

179 

Low Tauern Range, 75 

Lutherans, 9, 102; number of, 102-3 



Maastricht Treaty, 120 
magic pentagon, 130 
Magyars, 6 

Maria Theresa: accession of, 15; Hun- 
gary under, 17; penal code under, 252; 
as queen of Bohemia, 15; reforms un- 
der, 16-18 

Maria Theresa Military Academy, 239, 
240 

Marie Antoinette: marriage of, to Louis 
XVI, 15 

Marie Louise: marriage of, to Napoleon, 
19 

Marlborough, Duke of, 224 

marriage: age for, 98; frequency of, 96, 
98; prerequisites for, 96 

Marshall Plan (European Recovery Pro- 
gram), 54-55; aid under, 122; end of, 
57; industry under, 125 

materiel: acquisition of, 230, 233; air 
force, 230, 241; from Britain, 249; con- 
figuration of, 241; domestic, 241, 
248-49; exports of, 248-49; from 
France, 233, 241, 242, 244, 249; from 
Netherlands, 241; from Soviet Union, 
249; from Sweden, 233, 242-44, 249; 
from United States, 233, 241, 242, 244, 
249 

maternity benefits, 113 
Matthias (king), 11 
Maximilian I, 8 
Maximilian III, 11 
media, 210-13 
medieval era, 5-7 
Meissner-Blau, Freda, 201 
Methodist Church: official recognition of, 
102 



301 



Austria: A Country Study 



Metro SB-Grosshandel, 150 

Metternich, Clemens von, 19, 21-22; at 
Congress of Vienna, 19; domestic poli- 
cies of, 21-22; economy under, 22; in- 
ternational developments under, 21 

middle class, 95; political power of, 32 

migration, 83, 124; within Austria- 
Hungary, 86 

military: discipline, 245-47; justice, 
245-47; policy, 230 

military officers: commissioned, 239; in 
Habsburg Empire, 226; noncommis- 
sioned, 239, 240; promotion of, 
239-40; surplus of, 240; training of, 
239, 240 

military strategy: area defense concept, 
231, 235; deterrence, 230; in Habsburg 
Empire, 225; levels of threat in, 
230-31; in World War I, 227 

militias, 227 

minerals, 147-49; production of, 149 
mining, 147-49; employment in, 149; as 

percentage of gross domestic product, 

149 

ministries: distribution of, 175; number 
of, 175 

Ministry for Education, 104 
Ministry for Interior, 224, 254, 257 
Ministry for Justice, 175, 206 
Ministry for National Defense, 234 
Ministry for Science and Research, 104 
Ministry for Women's Affairs, 208 
minorities. See ethnic minorities 
Mobil Oil, 150 

Mock, Alois, xxx, 196-97, 206, 218, 219 
monasteries, 5 

Moravia, xxii, immigrants from, 88 

Mormon Church (Church of Jesus Christ 
of Latter-Day Saints): official recogni- 
tion of, 102 

Moscow Declaration (1943), 48 

Mur River, 70 

Mur River Valley, 75 

Miirz River, 70 

Miirz River Valley, 75 

Muslims (see also Islam), 103 



Napoleon III, 225 
Napoleonic Wars, 225 
Nationalbank, 158; monetary policies of, 
120, 132; privatized, 128 



National Council. See Nationalrat 
National Defense Academy, 239, 240 
National Defense Council, 234; members 
of, 234 

national identity, xxv, 3-4, 78-80; de- 
velopment of, xxv, 67, 68, 79-80; 
regional subcultures in, 74 
nationalism, xxii, 3; conflict of, with liber- 
alism, 22-23 
nationalist movement: anti-Semitism in, 

xxiv, 32; growth of, xxii, 32-33 
Nationalists/Liberals (see also German 

People's Party), xxix, 35, 36, 188 
nationalization (see also Austrian Indus- 
tries): under Allied occupation, xxvi, 
52; of industry, 124 
Nationalization Act (1946), 124 
Nationalization Act (1947), 124 
Nationalrat (National Council), 171-72, 
175-79, 201, 210; candidates for, 177; 
committees in, 176, 178; competition 
in, 178-79; dissolution of, 177; estab- 
lished, 39; interpellation in, 177; Klubs 
(factions) in, 176-77; legislation in, 
176; members of, 177-78; number of 
seats in, 177; powers of, 175-76; presi- 
dents of, 176; sessions in, 177; terms 
in, 177; women in, xxviii, 177 
Nationals. See German People's Party 
National Socialist Act (1947), 53 
National Socialist German Workers' 
Party (National-Sozialistische Deutsche 
Arbeiterpartei — NSDAP). See Nazi 
Party 

National Socialists. See Nazis 

National-Sozialistische Deutsche Ar- 
beiterpartei. See Nazi Party 

NATO. See North Atlantic Treaty Or- 
ganization 

Nazi occupation (see also Anschluss), xxiv, 
3; anti-Semitism under, 46; Austrian 
Nazis under, 45; Catholic Church un- 
der, 47, 102; economy under, 45-46, 
121; political parties under, 191; popu- 
lation policies under, 81, 88, 89; repres- 
sion under, 47; social policies under, 
45-46 

Nazi Party, 36, 204; influence of, 43-44; 

origins of, 36; outlawed, 42, 53; 

popularity of, 41; putsch by, 43 
Nazis: as percentage of population, 53; 

political parties of, 197; registration of, 

53 



302 



Index 



neoabsolutism, 22-26; failure of, 24-25 
neo-Nazis, 251-52 

Netherlands: in Habsburg Empire, xxi, 
9; materiel from, 241 

Neue Bahn (New Railroad), 152-54 

Neue Kronen- Zeitung, 210 

neutrality, xxx, xxxii-xxxiii, 55-56, 160, 
168; and armed forces, 232-33; under 
constitution of 1920, 213; definition of, 
57-58, 213; obstacles to, xxx, 55-56; 
under State Treaty of 1955, 223 

New Army Structure (Heeresgliederung 
Neu), 223, 231-32, 235-37; personnel 
under, 240; reduction in strength un- 
der, 237 

New Railroad. See Neue Bahn 

News, 211 

newspapers (see also journalists; media), 
210-12; circulation of, 210, 211; num- 
ber of, 211; party, 211; subsidies for, 
211 

Noricum (Celtic state), 4 
Noricum (arms manufacturer), 248 
North Atlantic Treaty Organization 

(NATO), 228-29, 233; founded, 55 
Northern Alpine Foreland, 70-73; climate 

in, 75 

North German Confederation, 26 

Norway: in European Free Trade Associ- 
ation, 217 

NSDAP. See National Socialist German 
Workers' Party 

nuclear power: as controversial issue, 61 , 
77; plans for, 62 



OAAB. See League of Austrian Workers 

and Salaried Employees 
OBB. See Austrian Federal Railroad 
OBB. See League of Austrian Farmers 
OECD. See Organisation for Economic 

Co-operation and Development 
OEEC. See Organisation for European 

Economic Co-operation 
Office of the People's Attorney, 183 
OGB. See Austrian Trade Union Fed- 
eration 

oil (see also petroleum): embargo of 1970s, 
62, 120, 126, 133; refining of, 150; 
reserves of, 150 

Olympic Games, 1980 Summer, 216 



OMV. See Osterreichische Mineralolver- 
waltung 

OPEC. See Organization of the Petrole- 
um Exporting Countries 

Operation Desert Shield, 233 

Operation Desert Storm, 233 

ORF. See Austrian Radio and Television 

Organisation for Economic Co-operation 
and Development (OECD), xxvi, 127 

Organisation for European Economic Co- 
operation (OEEC), 54, 57 

Organization of the Petroleum Exporting 
Countries (OPEC), 62, 250 

Osterreichische Bundesbahnen. See Aus- 
trian Federal Railroad 

Osterreichische Landerbank, 158; priva- 
tized, 132 

Osterreichische Mineralolverwaltung 
(OMV), 142, 143; petroleum refining 
by, 150 

Osterreichische Post/Telegrafenverwal- 
tung (national postal service), 142; sav- 
ings in, 159 

Osterreichischer Arbeiter- und An- 
gestelltenbund. See League of Austrian 
Workers and Salaried Employees 

Osterreichischer Bauernbund. See League 
of Austrian Farmers 

Osterreichischer Gewerkschaftsbund. See 
Austrian Trade Union Federation 

Osterreichischer Rundfunk. See Austrian 
Radio and Television 

Osterreichischer Wirtschaftsbund. See 
League of Austrian Business 

Osterreichisches Institut fur Wirtschafts- 
forschung (WIFO), 144 

Osterreichische Volkspartei. See Austrian 
People's Party 

Ostrogoths, 5 

Otakar II, 6-7 

Ottoman Empire: Hungary in, 9 
Otto the Great, 6 
OVP. See Austrian People's Party 
OWB. See League of Austrian Business 



Palestine Liberation Organization (PLO): 
recognition of, 63, 216 

Parity Commission for Prices and Wages, 
59, 137, 139-40; established, xxvi, 59, 
139; functions of, 139; members of, 
139; subcommittees of, 139 



303 



Austria: A Country Study 



parliament. See Bundesrat; Bundesver- 

sammlung; Nationalrat 
Patent Court, 182 

patronage, political {see also Proporz sys- 
tem): xxviii-xxix 
Peace of Aix-la-Chapelle (1748), 15 
Peace of Westphalia (1648), 12-13 
peasants, 94, 95; families of, 96, 98 
penal codes, 21, 252-53; capital pun- 
ishment under, 252; torture under, 
252 

People's Defense. See Volkswehr 

periodicals, 211-12; subsidies for, 211 

Perot, Ross, xxxii 

Perspectives '90, 192-93 

Peter, Friedrich, 198 

petroleum (see also oil): consumption of, 

149; imports of, 149, 150; refining of, 

150 

Phryn Pass, 75 
Pitterman, Bruno, 191 
PLO. See Palestine Liberation Organi- 
zation 

Poland: emigration from, 83-84; in- 
dependence of, 35; military support 
from, 14; partitions of, 17; in revolu- 
tion of 1989, 218 

Poles: as guest workers, 92; in Habsburg 
Empire, xxii, 18; immigration by, 
83-84; politics of, 31; popular opinion 
of, 94; as refugees, 83-84 

police. See Administrative Police; Crimi- 
nal Investigative Service; Federal 
Police; Gendarmerie; State Police 

political: affiliation, 103-4; asylum, 
83-85, 209-10; system, diversity in, 
167-68; unrest, 42 

political parties (see also under individual par- 
ties): cooperation among, xxv, xxviii, 
52; identification with, 190; outlawed 
by Dollfuss, 42 

population, 80; age distribution in, 83; of 
Czechoslovakia, 39; density, 74; distri- 
bution of, 73-75, 81-82, 124; in 1843, 
22; ethnic distribution in, 87, 89; 
growth, 80, 81; of guest workers, 83, 
85, 92; of Gypsies, 90; of Jews, 46, 80, 
91, 103; Nazi policies on, 81, 89; Na- 
zis as percentage of, 53; in 1900, 80; 
in 1919, 39; in 1991, 80; projected, 81; 
urban, 22; of Vienna, 22 

population fractions: engaged in agricul- 
ture, xxvi, 68, 145; engaged in forestry, 



68, 145; engaged in mining, 149; of 
ethnic minorities, 87, 89; working in 
services sector, xxvi, 60 
population statistics: birth rate, xxvii, 
80, 81, 85-86, 92, 96-98; death rate, 
80; fertility rate, 81, 83, 96; growth 
rate, 22, 81; infant mortality rate, 81; 
life expectancy, 82, 111; mortality rate, 
80 

Porsche Holding, 142 
Portugal: in European Free Trade Associ- 
ation, 217 
postal service, 142 
poverty, 96 

Pragmatic Sanction, 15 

president, 172-74; candidates for, 172; as 
commander in chief, 233; election of, 
172-73; powers of, 173; pressing 
charges against, 173-74, 179; role of, 
169, 173; succession to, 174; term for, 
172 

Presidential Conference of the Austrian 
Chambers of Agriculture, 139 

Presidial Conference, 176 

press {see also journalists; media; news- 
papers): under constitution of 1920, 
210; slander by, 211-12 

Presse, Die, 211 

prices, 132; controls on, 144, 191; food, 

145, 191 
prisoners, 258 

prison system, 257-58; population of, 

258; sentences in, 252 
privatization, 128, 132, 147, 192 
professional associations, 188 
professions, 136; regulation of, 135-36 
Profil, 203, 204, 211 
Proksch, Udo, 207 

Proporz system, 54, 175, 181, 183, 203 

prostitution, 252-53 

Protestantism (see also under individual 

denominations): official recognition of, 

102 

Protestant Reformation, 9-10 
Protestants: conflicts of, with Catholics, 
11-12; number of, 102-3; rebellion by, 
in Hungary, 11; rights of, 16 
provinces, 169-70 

Prussia: military relations with, xxi, 224, 
225; occupation of Poland by, 17; in 
Quadruple Alliance, 20; relations with, 
21; unification of Germany by, 3, 28 

Public Order Watch, 253 



304 



Index 



Qadhafi, Muammar al, 216, 250 
Quadruple Alliance, 20 



Raab, Julius, 56; as chancellor, 55, 58 

Radetzky, Joseph, 23 

radio, 156, 212-13; languages of broad- 
cast, 213; programming, 212-13; sta- 
tions, 212-13 

railroad system, 152-54; construction of, 
152-54; network, 152; passengers, 152 

Reder, Walter, 193, 202 

reform: under Joseph II, 16-18; under 
Maria Theresa, 16-18; under revolu- 
tion of 1848, 22 

Reformation. See Protestant Reformation 

refugees, 83; from Eastern Europe, xxxii, 
68, 81, 85, 94, 132, 223, 250; illegal, 
94; as security threat, 232 

Regulation of the Professions (Gewerbe- 
ordnung), 135-36 

Reinthaller, Anton, 197 

religion {see also under individual denomina- 
tions), 101-4; distribution of, in popu- 
lation, 103; of guest workers, 103; and 
political affiliation, 103-4; restrictions 
on, 12, 13; suppression of, 16 

religious tensions, 11-12 

religious tolerance, 16, 101-2 

Renner, Karl, 37-38, 191; as chancellor, 
38; as president, 51, 58; as head of 
provisional government, 48-50; plebi- 
scite under, 45 

Renner government, 38 

Republican Defense League (Repub- 
likanischer Schutzbund), 40, 227; per- 
sonnel strength of, 40; uprising of, 
227-28 

Republikanischer Schutzbund. See Re- 
publican Defense League 
Rerum Novarum (1891), 32, 138 
Resident Alien Law (1993), 92, 199 
retirement, 110-11; age for, 110; benefits, 
110-11 

revolutions of 1848, 22-26, 225 
RFW. See Circle of Free Business Persons 
Rhine-Main-Danube Canal, 70; trans- 
portation on, 155 
Riegler, Josef, 197 

Ring Freiheidicher Wirtschaftstreibender. 
See Circle of Free Business Persons 



rivers, 70; drainage system, 70; transpor- 
tation on, 155 

roads, 155; environmental damage from 
traffic on, 76, 155; freight transport on, 
155 

Roma. See Gypsies 

Roman Catholic Church. See Catholic 

Church, Roman 
Roman era, 4-5 

Romania: refugees from, 81, 250 
Romanian Orthodox Church: official 

recognition of, 102 
Romanians: as guest workers, 92; in 
Habsburg Empire, xxii, 18; popular 
opinion of, 94 
rural areas: social importance of, 144 
Russia (see also Soviet Union): colonial ex- 
pansion by, 30; in Crimean War, 25; 
interests of, in Balkans, 29, 33; mili- 
tary support from, 14; occupation of 
Poland by, 17; in Quadruple Alliance, 
20; relations with, 21; in World War 
I, 34 

Russian Orthodox Church: official recog- 
nition of, 102 
Russo-Turkish War (1877-78), 29 
Ruthenians: in Habsburg Empire, 18 



Sallaberger, Giinther, 206-7 

SALT. See Strategic Arms Limitation 

Talks 
Salzach River, 70 

Salzburg, 5-6, 18, 74; political affiliation 
in, 200; seats in Bundesrat for, 179; 
tourism in, 156-57 

Salzburg Program (1972), 195 

Salzburg Province, 69 

SAP. See structural adjustment program 

scandals, 202-7; in grand coalition, 
206-7; Lucona, 207; Reder, 193, 202; 
Sallaberger, 206-7; VOEST- Alpine, 
203; Waldheim, 168, 203-5; wine, 
202-3 

Scharf, Adolf, 56, 58, 191 

schilling {see also currency), 158; revalued, 

126, 162; tied to deutsche mark, 120, 

130, 162 
Schleswig: control of, 26 
Schmidt, Heide, 199, 209, 210 
Schonerer, Georg von, 36 
School Law (1962), 104, 106 



305 



Austria: A Country Study 



schools: Catholic, 104; elementary, 105; 
enrollment patterns in, 105, 106; 
higher, 105-7, 109; middle, 105-7, 
109; private, 109; technical, 106; voca- 
tional, 106 

Schuschnigg, Kurt von: as chancellor, 
xxiv, 43; meeting of, with Hider, 43-44 

Schuschnigg government, 43-44; consti- 
tution suspended under, 169; Nazi in- 
fluence in, 43-44; political parties 
under, 191 

Schwechat, 150, 156 

SDAP. See Social Democratic Workers' 
Party 

Second Republic: founded, xxv, 48-50 

security threats: levels of, 230-31; politi- 
cal instability as, 232; refugees as, 232; 
Serbia as, 33; Turkey as, 10-11; War- 
saw Pact as, 229 

Seipel, Ignaz, 36; as chancellor, 40 

self-administration associations, 139-40 

Semmering Pass, 75 

Serbia: expansion of, 30; Russia's protec- 
tion of, 33; as security threat, 33; war 
declared on, by Austria, 34; in World 
War I, 227 

Serbian Orthodox Church, 103; official 
recognition of, 102 

Serbs, xxii; as guest workers, 92; popu- 
lar opinion toward, 94 

services sector, 150-59; employment in, 
60, 142; growth of, 68, 140; as percen- 
tage of gross domestic product, xxvi, 
141 

Seven Weeks' War (1866), 26, 225 
Seven Years' War (1756-63), 17 
Seyss-Inquart, Arthur, 197 
Siege of Vienna (1529), 10 
Siege of Vienna (1683), 14 
Silesia, xxii 

Single European Act, 127 
Single Market, 143, 163 
Sinowatz, Fred: as chancellor, 63, 192, 
202 

Sinti. See Gypsies 

SJO. See Socialist Youth of Austria 
skiing: environmental damage from, 

77-78; and weather, 76 
Skoda company, 248 
Slavs: in Austria-Hungary, 27 
Slovakia, 223; border with, 69; im- 
migrants from, 88; joint venture agree- 
ments with, 162 



Slovaks: as ethnic minority, xxii, 87, 89; 
government of, in exile, 35; as guest 
workers, 92; immigration by, 5, 83; un- 
der Nazi occupation, 46; as refugees, 83 

Slovenes, xxii, 56; as ethnic minority, 87, 
88, 89; immigration by, 5; under Nazi 
occupation, 46; rights for, 62, 171 

Slovenia, 223; border with, 69; econom- 
ic relations with, 162-63; recognition 
of, 219 

Sobieski, Jan, 224 

social class: importance of, 68, 94-95 
Social Democratic Manifesto for the Year 
2000, 194 

Social Democratic Party of Austria (Sozi- 
aldemokratische Partei Osterreichs — 
SPO) (see also Social Democratic Wor- 
kers' Party; Socialist Party of Austria), 
190-94; auxiliary organizations, 194; 
candidates for, 194; in election of 1992, 
209; in election of 1994, xxxi-xxxii; 
federal conferences of, 194; member- 
ship in, 194; newspaper of, 211; organi- 
zation of, 194; platform of, 191-92, 
193-94; women in, 194 

Social Democratic Party of Austria Wom- 
en's Committee, 194 

Social Democratic Workers' Party (Sozi- 
aldemokratische Arbeiterpartei — 
SDAP) (see also Socialist Party of Aus- 
tria), xxii, xxviii, 32, 35, 37-45, 102, 
190-91; in elections of 1920, 40; in elec- 
tions of 1930, 41; founded, 32; militias 
of, 227; outlawed, 42; platform of, 32; 
popularity of, 40; role of, in govern- 
ment, 38; support of, for unification 
with Germany, 39 

Social Insurance Act (1955), 109 

Socialist Party of Austria (Sozialistische 
Partei Osterreichs — SPO) (see also So- 
cial Democratic Party of Austria; So- 
cial Democratic Workers' Party), 
xxviii-xxix, 4, 50, 188, 217; accommo- 
dation of, to church, 102; coalition with 
Freedom Party of Austria, 202-3; com- 
munication within, 192-94; economy 
under, 127; education reform under, 
107; in election of 1945, 51; in election 
of 1949, 54; in election of 1970, 61, 192; 
in election of 1971, 192; in election of 
1975, 192; in election of 1979, 192; in 
election of 1986, 190, 206; in elec- 
tion of 1990, xxviii-xxx, 190, 208; in 



306 



Index 



elections of 1991, 209; in grand coali- 
tion, xxviii, 56-60, 167, 190; under 
Kreisky, xxviii, 191-92; modifications 
in, 52, 192-94; platform of, 192; spe- 
cial interests of, 189 

Socialist Youth of Austria (Sozialistische 
Jugend Osterreichs— SJO), 194 

social partnership, xxi, xxvi, 59, 67, 120, 
124, 138-40; agriculture under, 138, 
144; incentives for, 124, 140, 167, 189; 
institutions in, 120, 125, 138; princi- 
ples of, 138-39 

social security, xxvi-xxv, 68, 109-14, 
191, 192, 218; organization of, 109-10; 
origins of, 109 

social structure, xxvii, 94-96; and decline 
in agriculture, xxvi, 143 

Society of Jesus. See Jesuits 

Southeastern Alpine Foreland, 73; climate 
in, 75 

South Tirol, 86-87, 219; autonomy for, 
56-57, 87, 219; ceded to Italy, 39, 
86-87; terrorism in, 219, 251 

Soviet Union {see also Russia): confisca- 
tion of Austrian assets by, 52, 122, 124; 
and detente with United States, 168, 
213; emigration from, 84; glasnost in, 
217; invasion of Afghanistan by, 216; 
invasion of Hungary by, 58, 229-30; 
materiel from, 249; occupation of Aus- 
tria by, xxiv-xxv, 48-56; reparation 
payments to, 122; role of, in occupa- 
tion, xxv, 54, 56 

Sozialdemokratische Arbeiterpartei. See 
Social Democratic Workers' Party 

Sozialdemokratische Partei Osterreichs. 
See Social Democratic Party of Austria 

Sozialistische Jugend Osterreichs. See So- 
cialist Youth of Austria 

Sozialistische Partei Osterreichs. See So- 
cialist Party of Austria 

Spain: in Habsburg Empire, xxi, 9 

Spar Osterreich grocery stores, 150 

Spezialfahrzeuge AG, 248 

SPO. See Social Democratic Party of 
Austria 

SPO. See Socialist Party of Austria 
Staatspolizei. See State Police 
Standard, Der, 211 
Stapo. See State Police 
Starhemberg, Ernst Riidiger von (prince), 
41, 224 

State Police (Staatspolizei — Stapo), 224, 



254, 255; illegal intelligence activities 
of, 256; restructuring of, 256 

state secretaries, 175 

State Treaty (1955), xxxii, 4, 55-56, 79, 
160; borders under, 171; government 
under, 171; minority rights under, 62, 
88, 171; neutrality under, 223, 232; 
reparation payments under, 122 

Steger, Norbert, 198, 202 

Stephen (king), 6 

Steyr: immigrants to, 88 

Steyr-Allradtechnik, 248 

Steyr-Daimler-Puch, 241, 248, 249 

Steyr-Mannlicher, 248 

Stock and Commodity Exchange, 182 

Stock Exchange Act (1989), 128 

Strategic Arms Limitation Talks (SALT), 
63 

Streicher, Rudolf, 209 
strikes, 140; general, 42, 227 
structural adjustment program (SAP): 

need for, 147 
Styria, 69; seats in Bundesrat for, 179; 

transit through, 75 
Styria, Duchy of, 6 

subsidies: for agriculture, xxx, 132, 144, 
145, 218; attempts to reduce, 128- 
29, 147; for nationalized industry, 132; 
for newspapers and periodicals, 211; as 
percentage of gross domestic product, 
128-29, 130; policies governing, 130-32 

suffrage. See voting 

suicide, 112 

Supreme Court, 181 

Swabians, 3, 5 

Sweden: defense spending in, 247; in 
European Free Trade Association, 217; 
materiel from, 233, 242-44, 249; mili- 
tary intervention by, 12; military train- 
ing by, 244; military troop strength of, 
240 

Switzerland: border with, 69; defense 
spending in, 247; emigration to, 86; in 
European Free Trade Association, 217; 
military troop strength of, 240; trade 
with, 160 

Syria: United Nations peacekeeping mis- 
sions in, 224, 233 



Taaffe, Eduard, 31 
Tdglich Alles, 210 



307 



Austria: A Country Study 



Tauern Pass, 75 

taxes: church, 104; income, 110; reform 
of, 129; social security, 109-10 

telecommunications, 156; regulation of, 
136; workers in, 136 

telephones, 156 

television, 156; cable, 212; channels, 212; 
languages of broadcast, 213; program- 
ming, 212; use of, in politics, 174 

terrorism, 219, 250 

Third Reich: Austrian Nazis in, 45 

Thirty Years' War (1618-48), 11-12; 
reconstruction following, 13 

Tirol, 69; population density of, 74; seats 
in Bundesrat for, 179; tourism in, 
156 

Tito, Josip Broz, 88 
topography, 70-73; drainage system, 
70 

tourism, 156-58; environmental damage 
from, 77-78; government support for, 
144; revenues from, 156, 160; and 
weather, 76 

trade, domestic: employment in, 150; as 
percentage of gross domestic product, 
150; regulation of, 136; retail, 150- 
52 

trade, foreign (see also balance of trade; ex- 
ports; imports), 159-60, 161; deficit, 
119; as percentage of gross domestic 
product, 169 

transit, 74-75, 83; through Brenner Pass, 
76, 152; by emigrants, 84 

transportation, 152-56; air service, 152; 
barge service, 70; bus service, 152; rail- 
roads, 152; regulation of, 136; river, 
70; workers in, 136 

Treaty of St. Germain (1919), 38, 86 

Treaty of Utrecht (1713), 14 

Trenck Military Sports Group, 251 

Trend, 211 

Trentino-Alto Adige. See South Tirol 
Triple Alliance (1882), 30, 34 
Triple Entente, 33 
Tulln-Langenlebarn Air Base, 242 
Turkey: in Crimean War, 25; peace 
agreement of, with Ferdinand, 11; as 
security threat, 10-11; siege of Vienna 
by, 10, 224 
Turkish wars, 14 

Turks: as guest workers, 92, 103, 133; 

popular opinion toward, 94 
Tyrolean Airways, 156 



Uberfremdung, xxix 

Uganda: immigrants from, 84 

unemployment, 41; benefits, 110; of col- 
lege graduates, 109; insurance, 110; 
interwar, 121; under Nazi occupation, 
45; rate, 125-26, 127, 129, 133 

unification of Austria with Germany. See 
Anschluss 

Union of Arts, Journalism, and the 
Professions, 136 

Union of Commercial, Clerical, and 
Technical Employees, 136 

United Austrian Iron and Steel Works 
(Vereinigte Osterreichische Eisen- und 
Stalhwerke— VOEST-Alpine), 142, 
147; financial scandal in, 203, 248; 
materiel manufactured by, 248; restruc- 
turing of, 206 

United Greens of Austria (Vereinigte 
Grime Osterreichs — VGO): in election 
of 1983, 63, 201; in election of 1986, 
201; in election of 1990, 208; platform 
of, 200 

United Nations: membership in, xxxii, 
213; peacekeeping forces, 219-20 ; peace- 
keeping missions, 168, 213, 223-24, 
232-33, 244; voting in, 216 

United Nations City, 157 

United Nations Industrial Development 
Organization, 213 

United Nations Universal Declaration of 
Human Rights (1948), 170 

United States, xxiii, xxiv-xxv, 252; 
aid from, 122, 124; and detente with 
Soviet Union, 168, 213; immigration 
to, 80; materiel from, 233, 241, 242, 
244, 249; occupation of Austria by, 
xxiv-xxv, 48-56; in World War I, 
34 

United States Arms Control and Disar- 
mament Agency, 249 
United States Department of Justice, 204 
universities, 107-9; attrition rate, 109; 
enrollment in, 107; overcrowding in, 
107 

University of Vienna, 104 
University Organization Law (1975), 
104 

Upper Austria, 69; seats in Bundesrat for, 

179; transit through, 75 
urban areas: population in, 22 
urbanization, 31-32 
urban migration, 68 



308 



Index 



Vandals, 5 

Vaterlandische Front. See Fatherland 
Front 

VdU. See League of Independents 

Venice: military support from, 14 

Verband der Unabhangigen. See League 
of Independents 

Vereinigte Griine Osterreichs. See United 
Greens of Austria 

Vereinigte Osterreichische Eisen- und 
Stalhwerke. See United Austrian Iron 
and Steel Works 

Vereinigung Osterreichischer Indus- 
trieller. See Federation of Austrian In- 
dustrialists 

VGO. See United Greens of Austria 

Vienna: as center for international negoti- 
ations, xxxii, 63, 250; ethnic minori- 
ties in, 87, 88, 90; growth of, 17; guest 
workers in, 92; immigrants to, 88; oc- 
cupied by Napoleon, 225; office space 
in, 163; politics in, xxiv, 40; popula- 
tion in, 22; port of, 155-56; as 
province, 69; riots in, 31; seats in Bun- 
desrat for, 179; siege of (1529), 10, 224; 
siege of (1683), 14, 224; tourism in, 157 

Vienna stock exchange, 159 

Viennese Basin, 73, 75 

Visigoths, 5 

VOEST- Alpine. See United Austrian Iron 
and Steel Works 

VOL See Federation of Austrian Indus- 
trialists 

Volkswehr (People's Defense): founded, 

38; suppressed, 40 
Vorarlberg, 69; seats in Bundesrat for, 

179; tourism in, 156 
voting: age for, 188; participation in, 188; 

reform, 31; rights, 191 
Vranitzky, Franz, xxviii, xxxi, 205, 208; 

background of, 192; as chancellor, xxxi, 

192, 205, 218, 219 



wages, 129, 191; collective bargaining for, 
110; in social partnership, 125; of wom- 
en, 101 

Waldheim, Kurt, xxxii, 4, 62, 93-94, 
209; international disapproval of, 
204-5; as president, 192, 203-5; pres- 
sure on, to resign, 205; scandal involv- 
ing, 168, 203-5; wartime service of, 



203-4 

War of the Austrian Succession (1740- 

48), 15, 224 
War of the Spanish Succession (1701-14), 

14, 224 

Warsaw Pact: breakup of, 231; invasion 
of Czechoslovakia by, 58, 83, 230; as 
security threat, 229 

Wehrmacht, xxiv, 47, 228 

welfare, xxvi-xxvii, 68, 109-14 

West Germany. See Germany 

Western European Union (WEU), xxxii 

Wiener, 211 

Wienerberger Baustoffindustrie, 143 
WIFO. See Osterreichisches Institut fur 

Wirtschaftsforschung 
Wilson, Woodrow, 35 
Windischgratz, Alfred, 23 
wine scandal, 203 
Wochenpresse, 211 

women, 99-101; in armed forces, 240; 
education of, 101; employment of, 
xxviii, 83, 101; equality for, xxviii, 61, 
100; income of, xxvii, 101; marriage of, 
xxvii, 96, 98; maternity benefits for, 
113-14; in police force, 255; in poli- 
tics, xxvii, 177, 194 

Women's Omnibus Law (1993), xxviii, 
100 

workers: benefits for, 61, 110; in services 
sector, 60 

workers, foreign. See guest workers 

workforce, 119; in agriculture, 141; guest 
workers as percentage of, 133; in indus- 
try, 141-42; percentage of, in labor 
unions, 136; in services sector, 142, 150 

working class, 95; families of, 98; univer- 
sity education for, 107 

works councils, 137 

World Jewish Council, 204 

World War I, xxi, xxiii, 33-34, 226-27; 
Austria's liabilities in, 38; deaths in, 80, 
227; purpose of, 226-27; Russia's with- 
drawal from, 34; strategy in, 227; Unit- 
ed States entry into, 34 

World War II, xxiv, 47-48, 228; Austria 
in, 47-48; Austrian Nazis in, 45; deaths 
in, 80, 90, 228; German defeat in, 
47-48 



Young Generation (Junge Generation — 
JG), 194 



309 



Austria: A Country Study 



Yugoslavia: civil war in, xxxii, 232; refu- 
gees from, xxxii, 81, 85, 103, 219, 250; 
territorial claims of, 55, 88 

Zentralamt judischer Auswanderung. See 



Central Office for Jewish Emigration 
Zentralsparkasse, 158 
ZjA. See Central Office for Jewish 

Emigration 
Zwentendorf nuclear power plant, 62, 77 



310 



Contributors 



Steven R. Harper is a government affairs analyst for the Earth 
Observation Satellite Company. 

Lonnie Johnson is coeditor of the quarterly Higher Education Science 
& Research in Austria for the Austrian Academic Exchange Ser- 
vice and is the author of Introducing Austria: A Short History and 
a forthcoming book on Central Europe for Oxford University 
Press. 

David E. McClave, formerly a Soviet affairs analyst at the Fed- 
eral Research Division, Library of Congress, is an indepen- 
dent researcher and writer on Central and East European 
politics and environmental issues. 

John F. Schaettler is a foreign affairs analyst for the Department 
of the Army. 

W.R. Smyser teaches and writes about European political econo- 
my and is the author of The German Economy: Colossus at the 
Crossroads. 

Eric Solsten is Senior Research Specialist in West European Af- 
fairs, Federal Research Division, Library of Congress. 

Jean R. Tartter is a retired Foreign Service Officer who has writ- 
ten extensively on Western Europe for the Country Studies 
series. 



311 



Published Country Studies 



(Area Handbook Series) 



550-65 


Afghanistan 


550-87 


Greece 


rcn no 


Albania 


c cn 7Q 


Guatemala 


550-44 


Algeria 


550-174 


Guinea 


550-59 


Angola 


550-82 


Guyana and Belize 


550-73 


Argentina 


550-151 


Honduras 


550-169 


Australia 


550-165 


Hungary 


550-1 /o 


Austria 


550-zl 


India 


550-175 


Bangladesh 


550-154 


Indian Ocean 


550-170 


Belgium 


550-39 


Indonesia 


550-66 


Bolivia 


550-68 


Iran 


550-20 


Brazil 


550-31 


Iraq 


550-168 


Bulgaria 


550-25 


Israel 


ooU-ol 


Burma 


c cn 1 on 

jjU-1oZ 


italy 


550-50 


Cambodia 


550-30 


Japan 


550-166 


Cameroon 


550-34 


Jordan 


550-159 


Chad 


550-56 


Kenya 


550-77 


Chile 


550-81 


Korea, North 


JJI/-DU 


v^nina 


4.1 


Korea, South 


550-26 


Colombia 


550-58 


Laos 


550-33 


Commonwealth Caribbean, 


550-24 


Lebanon 




Islands of the 






550-91 


Congo 


550-38 


Liberia 


550-90 


Costa Rica 


550-85 


Libya 


JJU - 


Cote d'lvoire (Ivory Coast) 


^Rfl 179 


Nlalawi 


550-152 


Cuba 


550-45 


Malaysia 


550-22 


Cyprus 


550-161 


Mauritania 


550-158 


Czechoslovakia 


550-79 


Mexico 


550-36 


Dominican Republic and 


550-76 


Mongolia 




Haiti 






550-52 


Ecuador 


550-49 


Morocco 


550-43 


Egypt 


550-64 


Mozambique 


550-150 


El Salvador 


550-35 


Nepal and Bhutan 


550-28 


Ethiopia 


550-88 


Nicaragua 


550-167 


Finland 


550-157 


Nigeria 


550-155 


Germany, East 


550-94 


Oceania 


550-173 


Germany, Fed. Rep. of 


550-48 


Pakistan 


550-153 


Ghana 


550-46 


Panama 



313 



550-156 


Paraguay 


550- 


-53 


Thailand 


550-185 


Persian Gulf States 


550- 


-89 


Tunisia 


C C A A O 

550-42 


Peru 


CCA 

550- 


-80 


Turkey 


550-72 


Philippines 


550- 


-74 


Uganda 


550-162 


Poland 


550- 


-97 


Uruguay 


550-181 


Portugal 


550- 


-71 


Venezuela 


550-160 


Romania 


550- 


-32 


Vietnam 


55U-3/ 


Rwanda and Burundi 


CCA 

ooO- 


1 OQ 

-183 


Yemens, Ihe 


c C/l C 1 

jjU-jI 


Saudi Arabia 


oou- 


QQ 

-yy 


Yugoslavia 


CCA "7A 

550-/0 


Senegal 


c c a 

550- 


-o/ 


Zaire 


550-180 


Sierra Leone 


550- 


-75 


Zambia 


550-184 


Singapore 


550- 


-171 


Zimbabwe 


c c a o<; 
55U-00 


Somalia 








550-93 


South Africa 








CCA AC 


Soviet Union 








550-179 


Spain 








550-96 


Sri Lanka 








550-27 


Sudan 








550-47 


Syria 








550-62 


Tanzania 









314 



PIN: 027043-000 



